Barclays Bank of Kenya Ltd

  • TickerBBK
  • ISINKE0000000067
  • ExchangeNairobi Securities Exchange
  • SectorBanks
  • CountryKenya
Faith Mwangi

Kenya: Restructured loans escalate as Covid-19 bites; negative for banks

According to the Treasury Cabinet Secretary, Kenya banks have restructured a total of KES360bn in loans as at June 2020. This represents 13% of total loans and is an increase from the 9.6% reported by the Central Bank of Kenya in April. Of these, personal household loans accounted for 53% of total loans restructured against a backdrop of continued job losses and pay cuts as well as shutting down of key employment sectors including tourism and horticulture from the Covid-19 outbreak. This is n...

Faith Mwangi

Absa Kenya: Q1 20: Earnings hit by loan loss charges and separation costs; downgrade to Hold

ABSA Kenya (formerly Barclays Bank; Hold, TP KES12.50) has released its Q1 20 results, with EPS rising 3% yoy. Before provisions, earnings were positive, with pre-provision income growing 24% yoy. The bank’s FX income jumped 47% yoy. We believe this was from big-ticket deals the bank had within the quarter – they are unlikely to recur in coming quarters. Operating expenses declined 5% yoy, with the bank currently focusing on reducing costs after cutting branches in 2019. The main current cos...

Faith Mwangi

Kenya's largest banks restructure 7% of loans – negative

According to the Central Bank of Kenya, the 7 largest banks in Kenyahave restructured loans amounting to KES176bn in April 2020 (7% of total loans as at January 2020)following the Covid-19 policy response that called forloan extension and restructuring. This is higher than the 3% in March. Excluding Standard Chartered Bank, we cover 6 out of the 7 largest banks in Kenya that include KCB, Equity, Co-op, NCBA (NIC bank and CBA group), ABSA Kenya (formerly Barclays) and DTB.We view the news as n...

Faith Mwangi

Absa Kenya: Earnings positive excluding one-off separation costs; Buy

Absa Bank Kenya (formerly Barclays; Buy, TP 12.50) has announced its FY 19 results, with EPS remaining unchanged at KES1.37. The numbers were weak due to the separation costs from the sale of the Barclays PLC stake, which amounted to KES1.5bn. Excluding these costs, normalised EPS was KES1.56, which represents 14% yoy growth – positive in our view. Non-interest revenue grew by 9% yoy, with Timiza – the bank’s mobile banking platform –delivering increased fee and commission income. Balance she...

Patrick Mumu

2019 Banking Sector Report

Executive Summary We recommend a HOLD on the banking sector. We note that the challenging business environment, occasioned by regulatory constraints, coupled with weakened asset quality, serve as impediments to growth. There still exists uncertainty with the interest rate cap ceiling. Our top pick in the sector is KCB Group with a Target Price of KES 62.52 and potential upside of 39.6% from the current market price. The bank is currently trading at the sector average of 1.2x P/B, despite having an ROE of 21.9%, the highest in the listed banking sector space. Further, key performance metrics e...

Faith Mwangi

Kenya: Restructured loans escalate as Covid-19 bites; negative for banks

According to the Treasury Cabinet Secretary, Kenya banks have restructured a total of KES360bn in loans as at June 2020. This represents 13% of total loans and is an increase from the 9.6% reported by the Central Bank of Kenya in April. Of these, personal household loans accounted for 53% of total loans restructured against a backdrop of continued job losses and pay cuts as well as shutting down of key employment sectors including tourism and horticulture from the Covid-19 outbreak. This is n...

Faith Mwangi

Kenya's largest banks restructure 7% of loans – negative

According to the Central Bank of Kenya, the 7 largest banks in Kenyahave restructured loans amounting to KES176bn in April 2020 (7% of total loans as at January 2020)following the Covid-19 policy response that called forloan extension and restructuring. This is higher than the 3% in March. Excluding Standard Chartered Bank, we cover 6 out of the 7 largest banks in Kenya that include KCB, Equity, Co-op, NCBA (NIC bank and CBA group), ABSA Kenya (formerly Barclays) and DTB.We view the news as n...

Faith Mwangi

Absa Kenya: Q1 20: Earnings hit by loan loss charges and separation costs; downgrade to Hold

ABSA Kenya (formerly Barclays Bank; Hold, TP KES12.50) has released its Q1 20 results, with EPS rising 3% yoy. Before provisions, earnings were positive, with pre-provision income growing 24% yoy. The bank’s FX income jumped 47% yoy. We believe this was from big-ticket deals the bank had within the quarter – they are unlikely to recur in coming quarters. Operating expenses declined 5% yoy, with the bank currently focusing on reducing costs after cutting branches in 2019. The main current cos...

Faith Mwangi

Absa Kenya: Earnings positive excluding one-off separation costs; Buy

Absa Bank Kenya (formerly Barclays; Buy, TP 12.50) has announced its FY 19 results, with EPS remaining unchanged at KES1.37. The numbers were weak due to the separation costs from the sale of the Barclays PLC stake, which amounted to KES1.5bn. Excluding these costs, normalised EPS was KES1.56, which represents 14% yoy growth – positive in our view. Non-interest revenue grew by 9% yoy, with Timiza – the bank’s mobile banking platform –delivering increased fee and commission income. Balance she...

Patrick Mumu

2019 Banking Sector Report

Executive Summary We recommend a HOLD on the banking sector. We note that the challenging business environment, occasioned by regulatory constraints, coupled with weakened asset quality, serve as impediments to growth. There still exists uncertainty with the interest rate cap ceiling. Our top pick in the sector is KCB Group with a Target Price of KES 62.52 and potential upside of 39.6% from the current market price. The bank is currently trading at the sector average of 1.2x P/B, despite having an ROE of 21.9%, the highest in the listed banking sector space. Further, key performance metrics e...

Patrick Mumu

Barclays Bank of Kenya Plc FY18 Earnings Note

Barclays Bank of Kenya Plc (NSE: BBK) announced a 7.1% y/y growth in Earnings per Share (EPS) to KES 1.37, in line with our expectation of KES 1.39. Adjusted for the one-off separation costs, coupled with potential IFRS 9 adjustments, EPS is estimated to have grown circa 17.0% y/y during the period. Net interest income (NII) was subdued (0.9% y/y) while non-interest revenue (NIR) was up 14.7% y/y, culminating in operating income growth of 4.7% y/y to KES 31.69Bn. Operating expenses were managed (2.4% y/y growth) as staff costs regressed 3.4% y/y, while Loan loss provisions increased 24.3% y/y....

Gerald Muriuki

Barclays Bank of Kenya Plc (NSE: BBK) 3Q18 Earnings Note

Barclays Bank of Kenya Plc (NSE: BBK) announced a 2.0% y/y growth 3Q18 profit after tax (PAT) to KES 5.4Bn, in line with our expected KES 5.5Bn. Net interest income (NII) grew 2.1% y/y while non-interest revenue (NIR) was up 14.0% y/y. Unlike other banks that have announced 3Q18 results the bank increased loan loss charges, by 21.3% y/y during 3Q18 following a 22.3% y/y increase in non-performing loans (NPLs) to settle at a record high NPL ratio of 7.7% from 7.2% in FY17 and against a 3-year average of 5.4%. Against 3Q18 results, we maintain a HOLD recommendation on BBK with a target price of ...

Ford Equity International Rating and Forecast Report

Ford Equity International Research Reports cover 60 countries with over 30,000 stocks traded on international exchanges. A proprietary quantitative system compares each company to its peers on proven measures of business value, growth characteristics, and investor behavior. Ford's three recommendation ratings buy, hold and sell, represent each stock’s return potential relative to its own country market.. The rating reports which are generated each week, include the fundamental details behind each recommendation and reflect the fundamental and price data as of the last trading day of the week...

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