(Adds detail, analyst, share price)
By Duncan Miriri
NAIROBI Feb 17 Barclays Bank of Kenya BBK1.NR
posted slightly better than expected results for 2008 and raised
its dividend, but predicted this year would be tough due to a
drought at home and global economic slowdown.
Ranked No. 1 by assets in east Africa's biggest economy, the
bank's pretax profit rose 13 percent to 8.016 billion Kenyan
shillings ($101 million), despite cautious growth in the loan
book and an 87 percent leap in provisions for bad debt.
Investors cheered the results, sending the bank's shares up
as much as 4.8 percent to 43.5 shillings on Tuesday. The shares
eased back 42.0 shillings at 1100 GMT.
"The market is thin and the 5 percent dividend and, frankly,
probably better than expected results has pushed the share up,"
said Aly Khan Satchu, an independent trader and analyst, adding
expectations were generally at rock bottom.
The bank, majority owned by British bank Barclays (BARC.L),
raised its 2008 dividend 21 percent to 2.0 shillings.
Like other Kenyan businesses, Barclays faced a challenging
start to 2008 when a bloody crisis erupted in January following
a disputed election, bringing the economy to a near standstill.
"These numbers are fully cognisant of the very difficult
operating environment. In light of the costs ... the profit was
more or less in line," said Kenneth Kaniu, an investment manager
at Stanbic Investments.
Managing director Adan Mohamed said 2009 was likely to be
tougher due to the global economic slowdown that has coincided
with a severe drought in Kenya.
The government has said about 10 million people are in need
of food aid and has appealed for international help, calling the
crisis a national emergency.
Costs rose nearly 30 percent to 14 billion shillings, mainly
due to the bank's expansion programme. The surge in costs was
also in step with a high inflationary environment, Mohamed said.
Healthy diversification of revenue streams was already
evident with income being generated from both retail and
commercial clients, he said. Customers more than doubled to
900,000 in 2008 compared with the previous period.
"Now that we have reached cruising levels we start focusing
on productivity and efficiency," he said.
In 2008, Barclays launched the second tranche of a 5 billion
shilling corporate bond to participate in long-term project
financing. Mohamed said the bank may return to the bond market.
"Our plan is to do that but at the right time and at the
right price. We are not desperate," he said.
(Editing by David Clarke and Dan Lalor)
($1 = 79.75 Kenyan shillings)