StanChart trails industry with 5.7pc profit growth

Standard Chartered Bank posted a 5.7 per cent growth in net profit for the nine months to September on increased lending and cheaper deposits.

The lender’s net profit stood at Sh6.8 billion in the period compared to Sh6.4 billion a year earlier — making it the slowest growth among the top tier banks that have announced their results so far.

StanChart’s profits were boosted by a 7.5 per cent increase in interest income to Sh15.9 billion and a Sh436.2 million drop in deposit costs.

“The quality of the asset book remains good and is well diversified and conservatively positioned. The consumer book is predominantly secured and we have selectively grown our unsecured portfolio,” StanChart said in a statement.

At 5.7 per cent, StanChart’s growth was below the industry average of 14.4 per cent as captured by Central Bank. Co-operative Bank reported a growth of 17.4 per cent in the nine months to September, KCB 15.4 per cent and Equity Bank 7.2 per cent.

Barclays Bank will announce their results on Friday through a press notice. It remains to be seen whether the bank has recovered from a 13 per cent drop in half-year net profit to Sh3.73 billion, weakened by a one-off payment for early retirements.

Cheap deposits have been the biggest driver of the bankers’ profit. The banks benefited from a cut in lending rates by the Central Bank, which sent lending rates down to a low of 14 per cent during the period, from 25 per cent a year ago, as deposit rates dropped by more than half.

StanChart’s share price Thursday closed at Sh309 compared to Sh306 the previous day, having gained 3.38 per cent over the past six months.