A surge in bad loans to Sh. 11.4 billion has seen profits realized by Barclays Bank of Kenya fall by 12 per cent to Sh. 7.3 billion net profit for the full year ended December 2016.
Barclays saw its loan loss provision rise 2.2 times to Sh3.9 billion as the stock of non-performing loans more than doubled.
Despite the fall, Barclays will pay a final dividend of Sh. 0.8 per share, bringing its total dividend payout for the year to Sh. 1 per share.
Barclays’ loan book expanded 16 per cent to Sh168.5 billion, helping to push interest income up 11.2 per cent to Sh28.1 billion.
“During the period under review, impairment grew due to a turbulent macro-economic environment which caused heightened job losses resulting in higher than usual default rates especially in unsecured personal loans,” Barclays said in a statement. “The growth in impairment was also driven by the early adoption of some aspects of the more conservative global accounting model referred to as International Financial Reporting Standard (IFRS)9.”
This accounting model is expected to be adopted across the banking sector by the year 2018.
