StanChart profit up 20.1pc helped by lower interest costs
Standard Chartered Kenya, whose parent company has been issuing profit warnings, grew its after-tax profit by 20.1 per cent in nine months to end of September 2014, helped by a cut in interest payments to depositors and sale of a property in the first half of the year. PHOTO | FILE
What you need to know:
Profit growth helped by a cut in interest payments to depositors and sale of a property in the first half of the year.
The management of the bank announced a Sh4.50 interim dividend for the shareholders.
Standard Chartered has grown its after-tax profit by 20.1 per cent in nine months to end of September, helped by a cut in interest payments to depositors and sale of a property in the first half of the year.
The bank reported an after-tax profit of Sh8.2 billion in the nine months through September compared to Sh6.8 billion made in a similar period last year.
StanChart paid its customers Sh2.2 billion for their savings of Sh164 billion, compared to Sh2.5 billion paid out last year for Sh144 billion deposits.
“Net interest income grew by eight per cent driven by strong growth in volumes but weighed down by the significantly lower interest rates charged in line with falling interest rates in the market,” said the bank’s chief executive Lamin Manjang.
StanChart’s “other income” surged to Sh2 billion compared to Sh600 million in September, with the bank attributing it to a property sale concluded in the first half of the year.
StanChart is the third most profitable lender in the country after KCB and Equity Bank.
The bank’s loan book shrunk by Sh6 billion in the three months to September, a period when it ran a promotion offering borrowers loans at lower lending rates. Its loan book stood at Sh125 billion in September compared to Sh131 billion in June.
On Wednesday the lender’s parent company signed a Sh17 billion loan with Kenya Power which could boost its books depending on whether it has signed a commission agreement with the local unit.
It grew its customer savings by Sh20 billion during the third quarter, being the fastest growth among the large banks that have been facing increased competition from the mid-sized lenders.
StanChart’s non-performing loans dropped marginally to Sh13.3 billion from Sh14.5 billion in June. This is in spite of the government saying it had paid its contractors who are said to be the major contributors to the bad book.
“We remain disciplined in our approach to risk management and pro-active in our collection efforts to minimize account delinquencies,” said Mr Manjang.
The management of the bank announced a Sh4.50 interim dividend for the shareholders. Last year it did not pay an interim dividend but a final payout of Sh14.50.
They are also paying an interim dividend on preference shares at the rate of six per annum on the issue price of each share. the bank will close the register of shareholders who qualify for the dividend on December 8.
Thursday, StanChart’s stock at the Nairobi Securities Exchange traded at Sh334 each down from the previous day’s Sh331.
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