Barclays Bank of Kenya has announced that 323 employees left the bank last year and that it recorded a 6.4 percent full-year net profit decline to Sh6.9 billion. The bank closed the year with 2,268 employees compared to 2,591 in 2016.
The bank said it lost the employees through a restructuring process where it closed down 12 branches to close the year with 89 branches, most of them located in Nairobi.
The bank’s net profit drop from Sh7.4 billion in 2016 was caused mainly by interest rate caps regulations that affected its interest income.
“During the year, we had to make a couple of tough and unpopular decisions in order to simplify the organisation amidst a tough working environment,” Jeremy Awori, Barclays Kenya chief executive said.
“We closed several branches, which were too close to each other and giving sub-optimal returns. We also reduced our headcount by 12 percent.”
The CEO also said the bank had in the last two months arranged a small voluntary early retirement (VER).
Other banks have also lost hundreds of employees due to the interest rate capping law. Barclays is the first commercial Kenyan bank to announce its full-year results. Barclays bank recorded a 3.4 percent interest income dip to Sh27.2 billion. The interest income is inclusive of customer loans and government securities.
On the other hand, non-interest income (fees and commissions and dividend and foreign exchange income) decreased by Sh892 million to close the financial year at Sh8.5 billion.
The bank closed the year with a Sh168.4 billion loan book, which was the same amount in 2016. Additionally, customer deposits surged 4.4 percent to Sh186 billion.
The bank was also affected by the long election period which resulted in clients withholding on drawing down on approved facilities.
“We are seeing these customers come back to draw down on their facilities. The confidence is back,” Awori said.