Stanchart declares Sh2.2 billion interim dividend

Standard Chartered Bank branch on Kenyatta Avenue. FILE PHOTO | NMG

Standard Chartered Bank Kenya has declared an interim dividend of Sh6 per share or an aggregate of Sh2.2 billion after posting a 37.1 net profit growth in the nine months that ended September.

The company is expected to announce the date for the book closure and payment of the dividend.

“The directors are pleased to announce the payment of an interim dividend of Sh6 for every ordinary share. The board recognises the importance of dividends to shareholders and remains committed to sustainable shareholder returns,” the lender said in a statement yesterday.

Stanchart made a net profit of Sh8.7 billion in the review period, up from Sh6.3 billion a year earlier. The earnings growth was largely due to a sharp reduction in costs.

Its loan loss provisions shrunk by Sh2 billion to Sh621 million, contributing to operating expenses falling eight per cent to Sh12.2 billion.

The lower provisions came despite gross loan defaults rising by Sh1 billion to Sh24 billion, indicating that the bank expects the stock of bad loans to reduce going forward.

Stanchart also benefitted from a 16.1 per cent jump in non-interest income to Sh8.7 billion, with the bulk of the revenue coming from foreign exchange trades.

Most of the big banks have reported a surge in income from foreign exchange transactions in a period when global currencies have seen increased volatility in the wake of the Russia-Ukraine conflict.

Stanchart’s total interest income rose 4.1 per cent to Sh18.2 billion as the bank invested more in government debt securities compared to ordinary loans.

Its purchases of treasuries expanded by Sh12.9 billion to Sh111.9 billion while the loan book grew by Sh4.3 billion to Sh136 billion.

Interest expenses declined 12.6 per cent to Sh2.4 billion despite customer deposits rising 10.7 per cent to Sh286 billion, indicating a rise in non-interest-bearing accounts.

Stanchart is among the listed banks that have resumed paying interim dividends, joining others like KCB Group, NCBA Group and Absa Bank Kenya which have announced or made per-share distributions of Sh1, Sh2 and Sh0.2 respectively.

Most of the interim dividend declarations, which were traditionally made at the half-year mark, came late as banks adopted a wait-and-see stance ahead of the country’s recent General Election.

Stanchart’s chief executive Kariuki Ngari said the bank is optimistic about the future outlook, noting that several challenges remain.

“The external environment remains challenging although, with the steady drop of oil prices, inflationary pressure might abate in the short term,” Mr Kariuki said in a statement.

“The impact of the Russian invasion of Ukraine continues to cast a dark cloud on the global economy. We are optimistic that our economy is on the rebound now that the elections are well behind us. We look forward to playing our role of assisting both individuals and businesses on their growth agenda.”

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