* Dividend cut and fall in profit drives shares down
* Loans, deposits seen growing after years of stagnation
* New revenue lines include investment banking
(Adds outlook, share price)
By Duncan Miriri
NAIROBI, Feb 6 Barclays Bank of Kenya
reported a 14 percent drop in 2013 pretax profit because of
higher costs and provisions but expects a growth in lending and
deposits this year to help it meet profit goals, the chief
financial officer said.
The unit of Barclays Plc cut its dividend, a move
that contributed to a 6.4 percent fall in its share price to 16
shillings in the first hour of trading after the results.
Although the bank is one of the oldest in the country, it
has seen its earnings grow at a slower pace than its rivals in
recent years, as its model of focusing on wealthier clients was
challenged by home-grown lenders like Equity Bank.
Pretax earnings fell to 11.13 billion shillings ($129
million) in 2013, although the bank said the eight-fold jump in
provisions was because of a one-off recovery of bad debt worth 1
billion shillings in 2012 that was not repeated in 2013.
"Excluding the one-off recoveries, the impairment charge
would be in line," Chief Financial Officer Yusuf Omari said.
The bank cut its dividend per share to 0.70 shillings from 1
shilling to build capital in line with new central bank demands.
"We are starting on a very good base with a very healthy
balance sheet, with very good capital and liquidity ratios that
will be able to propel us to meet our short-term and long-term
targets," Omari told reporters at an investor briefing.
Loans grew 14 percent to 118 billion shillings in 2013 while
deposits rose by 10 percent to 151 billion shillings, marking a
shift from years of negative or flat growth.
"We have seen a growth in terms of the balance sheet, which
gives us a very good space for 2014. Most of this came in the
second half due to the effect of the election period," Omari
said, after the presidential vote in 2013 slowed the economy.
Demand for loans was curbed in the first half of 2013 due to
uncertainty surrounding the March 4 polls, after the previous
election in 2007 was marred by violence.
Omari also said additional revenue streams, such as
insurance products and investment banking business, would boost
earnings in 2014.
The investment banking team at Barclays clinched two big
deals, to arrange a bond for local electricity producer KenGen
and to help arrange Kenya's debut Eurobond, expected
to be launched later this year.
The bank is also boosting capacity to lend or arrange
financing for the country's emerging oil and gas industry
following discoveries in 2012, Omari said.
Total income last year rose 2 percent to 27.92 billion
($1 = 86.1500 Kenyan shillings)
(Editing by Edmund Blair and Pravin Char)