The drop in net profit for this year is attributable to a decline in income from its South Sudan branch. PHOTO | FILE |
What you need to know:
CFC is in the process of converting the South Sudan branch to a subsidiary following a good performance last year which was it first full year in operation.
CFC Stanbic Bank has reported a 28 per cent drop in profit after tax for the three months to March this year attributable to a decline in income from its South Sudan branch.
The bank said it had made a net profit of Sh1.1 billion in the first quarter of the year compared to Sh1.6 billion in a similar period last year.
The lender's income from fees and commissions dropped by Sh1.3 billion to Sh1.7 billion with income from foreign currency trading taking the biggest hit.
“The drop was mainly due to a decline in fee and foreign exchange revenues from the South Sudan branch. The current political impasse, which manifested in December 2013, coupled with the drop in global oil prices has hampered economic activity in the country,” the bank's chief executive Philip Odera said.
CFC is in the process of converting the South Sudan branch into a subsidiary following good performance in 2014, also its first full year in operation.
The bank cut its operating expenses by Sh600 million to Sh2.1 billion but was not able to grow its net interest income to fill the gap of lower non funded income.
Trading from foreign currency slumped to Sh536 million from Sh1.1 billion in March last year while other income – usually from sale of treasury bills and bonds – fell to Sh611 million from Sh1 billion last year.
Some of the expenditure lines that were cut include staff costs, loan loss provisions and other expenses.
Customer loans and advances were up by Sh2 billion to Sh90 billion while its deposits rose to Sh105 billion from Sh96 billion in December.
CFC Stanbic becomes the first major lender to announce a profit dip this year with the others that have announced so far, Equity, KCB, Barclays and Co-operative Bank declaring double digit growth.
