Barclays share price in focus as Kenyan unit reports double-digit growth

Barclays plc’s (LON:BARC) Kenyan branch said pretax profit climbed 10 percent last year, mostly as a result of growth in net interest income and lower costs. The offshoot expects further double digit growth in 2015, boosted by new products and services offered.

Barclays Bank of Kenya said earlier today that pretax profit rose to 12.3 billion Kenyan shillings (£88.8 million) in 2014. Net interest income climbed 3.7 percent to 19.6 billion shillings but the growth was offset by a drop in non-interest income. Operating costs fell about six percent to 14.6 billion shillings, improving the cost-to-income ratio to 52 percent from 53 percent a year earlier.
Jeremy Awori, chief executive of the subsidiary, was cited across the media as claiming that the company sees “significant opportunity going forward”. The lender said it would increase its services for the small and medium enterprise (SME) segment this year in order to boost growth. Awori was quoted by Bloomberg as saying:

“We’ve got new revenue streams that we want to look at; we’ve started an investment-banking unit, we’ve split off and relaunched a business-banking division which will focus on SMEs and we think that will drive significant growth”. Barclays’ unit in East Africa’s biggest economy recently received a stock-broking license and a bancassurance license that allows it to offer insurance products.

Barclays Kenya’s share price closed over three percent up on the Kenyan stock exchange in Nairobi. At press time, the group‘s shares were trading 0.02 percent up at 266.02p in London, extending the 9.24 percent year-to-date climb.
According to the Financial Times, as of 20 February, 2015, the consensus forecast amongst 34 polled investment analysts covering Barclays PLC has it that the bank will outperform the market. The median target of the 26 analyst offering 12 month price targets is 292.50p with a low estimate of 210.00p and a high estimate of 350.00p.
As of 13:57 GMT, Friday, 06 March, Barclays share price is 266.00p.