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StanChart overtakes Barclays with 14.8pc growth in earnings

StanChart CEO Lamin Manjang (right) with chairperson Ann Mutahi during the release of results for the financial year ended December 2013 in Nairobi on Tuesday. Photo/DIANA NGILA
StanChart CEO Lamin Manjang (right) with chairperson Ann Mutahi during the release of results for the financial year ended December 2013 in Nairobi on Tuesday. Photo/DIANA NGILA  

Standard Chartered has for the first time in three years overtaken Barclays in earnings to become Kenya’s third most profitable bank on the back of increased lending and a drop in interest expenses.

The lender on Tuesday announced a 14.8 per cent jump in 2013 full-year after-tax profit to Sh9.2 billion, overtaking the other listed subsidiary of a UK banking transnational that reported Sh7.6 billion.

StanChart has since 2010 been placed fourth in the net profit table behind rivals KCB, Equity and Barclays.

Its improved performance now puts it in a neck and neck battle with indigenous lender Co-op Bank which posted Sh9.1 billion last year to edge Barclays to position five.

“The Kenyan banking market is dynamic and getting increasingly competitive. We will continue to leverage on the advantage of being a local and international bank to serve our customers across several markets,” said Lamin Manjang, chief executive Standard Chartered Bank Kenya, at an investor briefing on Tuesday.

StanChart’s best performance in recent years was in 2009 when it made a net profit of Sh4.7 billion to rank second after Barclays which raked in Sh6.09.

Indigenous banks — aided by regional subsidiaries and aggressive domestic expansion — have dominated the profit rankings since 2011 when KCB posted Sh10.9 billion to be the most profitable lender, unseating Barclays which made Sh8.1 billion.

Increase dividend pay

KCB was in 2013 graded the most profitable lender after it made Sh14.3 billion, followed by Equity (Sh13.2 billion), StanChart (Sh9.2 billion), Co-op (Sh9.1 billion) and Barclays (Sh7.6 billion).

The performance has seen StanChart increase dividend pay by 16 per cent to Sh14.50 per share from Sh12.50 per share paid in 2012.

This will be a boon for Standard Chartered Plc which will rake in Sh3.3 billion from its 73.89 per cent stake in the Kenyan unit.

“This dividend pay out gives us the right balance between bolstering our capital base to enable us pursue growth in loans and advances, continue to deliver attractive returns to our investors as well as ensure we meet the enhanced capital requirements,” said Mr Manjang.

The bank saw its net interest income grow by Sh2.5 billion to Sh16.7 billion while fees and commissions increased by Sh278 million, becoming the key drivers of the additional profit of Sh1.2 billion.

Its loan book grew by an aggressive 15 per cent or Sh16.9 billion last year to stand at Sh129.6 billion, beating Barclays Kenya’s total loans which expanded by Sh14 billion to stand at Sh118 billion in December last year.

“There was strong growth in consumer loans as well as lending to large corporate clients and mid-sized companies in our wholesale banking,” said Mr Manjang.

He was appointed CEO in January this year following the exit of Richard Etemesi who was promoted to head StanChart Plc’s South African unit.

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