Barclays Bank Kenya has posted an impressive half year pre-tax profit of Ksh 4.7 million up from Ksh 4.5 million in the previous year, a 5.2 per cent increment.

Despite an increase in operating costs due to staff related costs in the first quarter, Barclays also on Friday declared an impressive interim dividend of Ksh 0.75 per share, a 50 per cent increase compared to Ksh 0.5 offered in 2009.

Speaking during the announcement of the results the bank Managing Director, Mr. Adan Mohamed attributed the good balance sheet to focus on good margin management in a low interest environment.

The Central Bank of Kenya’s recent call on commercial banks to lower their lending rates so as to ease access to credit by Small and Medium enterprises was well received by Barclays which had earlier reduced its base lending rate.

According to Mr. Mohamed lending on longer contractual terms was proving difficult since the cost of funding the loan was prone to unpredictable changes.

“If a bank enters into a 7-year lending contract, it’s quite hard because the cost of funding the loan at the beginning might not be the same four years later,” he said.

Mr. Mohamed expressed optimism about the second-half of the year when economy is expected to show an improvement following the recent passing of a new constitution.

Businessman Chris Kirubi maintained that banks must participate in creating a favorable environment for economic growth by lowering lending rates.

CAROL MUTHONDU