Genghis Capital - Absa Bank Kenya (ABSA) Barclays Bank of Kenya Plc FY18 Earnings Note

Report

Genghis Capital

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. The bank recorded strong asset growth (19.8% y/y) to KES 324.84Bn, supported by the 11.5% y/y growth in customer deposits, with the loan book growing at a modest 5.3% y/y. A total dividend of KES 1.10 was declared, a 10.0% increase from FY17, which translates to a dividend yield of 9.5% against the current market price. We are currently reviewing our banking sector coverage and valuation.

12/03/2019 4 EN

Underlying

Absa Bank Kenya

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KE0000000067 Nairobi Securities Exchange Kenya

Provider

Genghis Capital

Genghis Capital is an innovative and customer focused Investment Bank licensed by the Capital Markets Authority (CMA). Founded in 2008, Genghis is one of the leading investment banks in Kenya. Since its establishment, Genghis has achieved tremendous growth to offer a well-diversified portfolio of financial services that includes:

i. Securities(Equity/Debt) Trading
ii. Research
iii. Wealth Management services
iv. Investment Advisory & Management via the GenCap Unit Trusts
v. Corporate Finance & Transaction Advisory services

The Kenyan Capital Markets continue to develop in size, scope and sophistication. With this is an increasing demand for more specialized and personalized brokerage service and we at Genghis Capital are glad to be able to offer you this service. Our strength lies in ensuring our clients are up to speed with developments at the stock market and the economy. Research and technology remains our competitive and comparative advantage hence Experience, Expertise and Professionalism are some of the qualities you can expect from our team.

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Analysts

Patrick Mumu

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