Kenyan Barclays Bank first-half pretax up 5 pct
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Kenyan Barclays Bank first-half pretax up 5 pct UPDATED 04 Aug 2009 | 09:43  
Kenyan Barclays Bank first-half pretax up 5 pct

By Helen Nyambura-Mwaura

NAIROBI (Reuters) - Barclays Bank Kenya's profit in the first half rose marginally on the back of lower economic growth, but its customer loan book was slimmer as the bank chose to lend more to the government.

The bank, Kenya's second biggest in terms of assets, said on Tuesday it made 4.52 billion shillings pretax in the first six months, 5 percent above what it brought in during the same period last year.

Kenya's banking sector has been somewhat resilient in the face of weaker economic performance but at least two other banks have reported slower growth in the first half compared with the same period last year.

"When things are good, and the road is smooth, you move fast, you press on the accelerator because the appetite to take risk is much bigger than normal," Managing Director Adan Mohamed told reporters.

"When there is a headwind ... you've got to have flexibility in the way you manage your portfolio."

Barclays Bank Kenya, majority-owned by Britain's Barclays, said loans and advances to customers dropped 7.8 percent to 98.4 billion shillings in the first half, but government securities rose 54 percent to 38.7 billion.

Loan-loss provision fell almost 50 percent to 398 million shillings.

The bank's net interest income grew 3 percent to 7.07 billion shillings, which Mohamed said was a payback from an expansion programme the bank embarked on 18 months ago and more prudent spending.

"We've managed to reach this level of income growth largely through tighter management of margins as a way of making sure we improve our top line," he said.

Operating costs were stable at 6.5 billion shillings and total assets grew to 170 billion from 166 billion.

At 0900 GMT, its shares traded at 51 shillings, down from Monday's close of 51.50 shillings.


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