Stanbic Bank Kenya has posted a 2.7 percent growth in net profit for the first quarter ended March to Sh3.9 billion from Sh3.8 billion in a similar period a year earlier.
The small earnings growth was supported by a fall in non-interest-related expenses for the bank which helped to offset a slump in operating income during the quarter.
The subsidiary of Stanbic Holdings Plc saw its total operating income fall by 8.2 percent to Sh10.2 billion from Sh11.1 billion in March last year.
This drop is largely attributable to a significant decline in foreign exchange trading income which cut the bank’s non-interest funded income by 34.8 percent to Sh3.7 billion from Sh5.7 billion previously.
Forex trading income was wiped by 45 percent to Sh2.3 billion from Sh4.2 billion in March 2023, signifying the effects of the end of local currency volatility and dollar access difficulties on lenders’ balance sheets that had handed banks a windfall in recent years.
Stanbic’s net interest income meanwhile grew by 18.5 percent to touch Sh6.4 billion in the quarter from Sh5.4 billion.
The income line was supported by greater earnings from loans following the upward revision of interest rates including from the implementation of risk-based pricing.
Interest from loans and advances soared to Sh9.2 billion from Sh6 billion last year.
The interest rate gains were, however, partly offset by a higher payout to the bank’s depositors as interest expenses on customer deposits increased by 172 percent, hitting Sh4.9 billion from Sh1.8 billion previously.
The higher costs pushed the bank's total interest expenses up by 133 percent to Sh5.6 billion from Sh2.4 billion.
NPL slumps
Spending on non-interest related expenses, meanwhile, slumped on a cool down in other expenses with total other operating expenses/non-interest expenses easing by 16.1 percent to Sh4.7 billion from Sh5.6 billion.
The bank kept its loan loss provisioning costs unchanged in the quarter at Sh1.1 billion as gross non-performing loans slumped by 17.2 percent to Sh24.2 billion from Sh29.2 billion a year ago.
Stanbic Bank Kenya is the most important subsidiary of Stanbic Holdings which is listed on the Nairobi Securities Exchange.
