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Barclays profit jumps to Sh13b

NAIROBI, Kenya, Feb 22 – Barclays Bank of Kenya on Tuesday announced a 51 percent jump in pre-tax profit for the year ended 31 December 2010 to stand at Sh13.6 billion. This compares to a gross profit of Sh9 billion posted the previous year.

Managing Director Adan Mohamed attributed the improved results to the sale of its custody business, from which it gained Sh3.5 billion.

Total income increased by 11 percent to Sh26 billion compared to Sh23 billion in the previous year.

Commenting on the results, Mr Mohamed said: "Barclays\’ strong financial performance was largely driven by revenue growth, and tight management of operating costs offset by an increase in impairment for non performing consumer loans. There also was a one-off restructuring charge on a recently announced staff restructuring exercise. "

The bank said interest income grew by six percent and that it had raised its dividend for the year by 118 percent to Sh4.70 per share.

"At the same time, subject to shareholder and regulatory approvals, the Board resolved to recommend to shareholders a share split of 4 for every one of the existing ordinary shares held, making Barclays shares more available on the Nairobi Stock Exchange," a statement from the institution said.

The bank said that it successfully implemented a new banking technology platform in 2010 that will significantly improve its interaction with customers and enhance its operational efficiencies.

"We enhanced our customer value proposition, targeting corporate and business banking as well as local and consumer businesses. Our ability to reach customers and serve them better was strengthened with new products and additional channels, including Internet Banking which complements our Hello Money mobile banking service and is supported by our 24/7 Contact Centre," said Mr Mohamed.

Looking forward, Mr Mohamed said: "We remain optimistic about opportunities ahead and having made the necessary investments in technology, people, and our distribution network during the last three years, we have an unparalled advantage to propel our growth into the future."

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Job losses

The results come at a time when Kenyan banks are increasingly looking at reducing their staff and payrolls to trim the excess fat and grow profits.

Barclays Bank in January announced plans to shed 200 management-level staff to curb its run-away employee costs, a plan that is being implemented in the parent company interests globally.

Other top banks including Equity and Co-operative have announced a freeze in hiring plans and job cuts while KCB has hired global consultancy firm McKinsey & Company to help create a new organisation structure especially on its executive suites.

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