UPDATE 1-Barclays Kenya sees recovery after one-off hit to H1
NAIROBI, Aug 6 (Reuters) - Barclays Bank of Kenya said peaceful presidential elections and a more stable economic environment should lead to a better second half, after its first-half profit was hit by a one-off payment for early retirement costs.
Although the bank is one of the oldest in the country, it has seen its earnings grow at a slower pace than its rivals in recent years, as its model of focusing on wealthier clients was challenged by home-grown lenders like Equity Bank.
Jeremy Awori, the managing director for the bank that is controlled by Barclays Plc, said first-half profit fell to 5.5 billion shillings ($63 million), but would have been flat for the period at 6.3 billion barring the one-off cost.
"The current macroeconomic environment provides a better opportunity for growth in the second half," he said, citing the passage of a peaceful presidential election in March, which is expected to spur demand for credit.
Demand for loans was curbed in the first half due to uncertainty surrounding the March 4 polls, after the previous election in 2007 was marred by violence.
The central bank has maintained its benchmark lending rate at 8.5 percent since May, pointing to stability of interest rates following steep drops in the previous ten months.
Barclays Kenya spent 788 million shillings on voluntary early retirements, while operating costs edged down by a percentage point, it said in a statement.
It declared an interim dividend of 0.20 shillings per share, down from 0.30 shillings in the same period last year. Earnings per share fell to 0.69 shillings from 0.79 shillings.