* H1 pretax profit up 12 pct to 6.1 bln shillings
* Withholds dividend to expand capital base, invest
* Loan book grows 20 pct
(Adds detail on real estate loan plans)
NAIROBI, Aug 12 Barclays Bank of Kenya
plans to start a mortgage finance division to tap demand for
housing that far outstrips supply in the east African country.
The announcement came as Barclays reported a 12 percent jump
in first-half pretax profit on Tuesday, largely due to a surge
in customer loans and net interest income.
It launched an investment banking division in the first half
of the year and was lead arranger in Kenya's first sovereign
bond issue worth $2 billion in June. It hopes to capitalise on
this to raise funds from international debt markets.
The investment banking arm "will allow us to diversify into
transactional services such as debt and equity capital markets
as well as mergers and acquisitions," Barclays Kenya's managing
director Jeremy Awori said in a statement.
The bank said it would not pay an interim dividend to enable
it to meet new capital requirements set by the Central Bank of
Kenya and raise capital for investment. It paid an interim
dividend of 0.20 shilling per share in the year-ago period.
Shares in Barclays Kenya were unmoved at 17.05 shillings,
with traders saying the lack of an interim dividend had
disappointed and subdued interest in the stock.
The bank, controlled by Barclays Plc said profit
was 6.1 billion shillings ($69.36 million), with the loan book
growing by 20 percent to 128 billion shillings.
Awori said he expected interest rates to ease, which would
buoy lending, and the bank was keen to expand its mortgage
portfolio, with annual demand for housing in Kenya outstripping
supply by about 100,000 units.
Kenya's government says the Eurobond will cut the
government's local borrowing requirement and help reduce
Barclays Kenya's profit lagged its rivals Equity Bank
, the country's biggest by deposits, and KCB,
the largest by assets. KCB also has a dedicated mortgage unit
and plans to raise funds from international debt markets for
lending to the real estate sector.
"Overall the results were solid, and we forecast even better
results for the full year," said Joy D'Souza, a research analyst
at Kestreal Capital. "Barclays has in the past been risk-averse
and shy in lending and has lagged its peers."
Barclays said its net interest income grew by 5 percent to
9.7 billion shillings, while non-interest income fell by 5
percent mainly due to a decline in foreign exchange income in a
stable currency market.
Non-performing loans fell 5 percent to 4.2 billion
(Reporting by James Macharia; editing by Tom Pfeiffer)