Standard Chartered Bank of Kenya has reported a 38.2 percent drop in net profit for the nine months ended September, while disclosing the Sh7.2 billion cost of settling the pension claim awarded by the Supreme Court to its former employees.
The bank reported a net profit of Sh9.7 billion, down from Sh15.8 billion over a similar period last year, attributable to a Sh2.7 billion one-off cost included in staff expenses for making partial payment towards the court settlement.
StanChart disclosed that it had set aside a cumulative Sh2 billion fund during the 16-year lawsuit to correct erroneous pension calculations for appellants.
This means the bank increased its staff pensions kitty by Sh4.7 billion to pay the 629 former employees, and has also started to make payments of an additional Sh2.5 billion awarded to the appellants.
The total payout to the appellants will therefore be Sh7.2 billion.
“We have delivered a resilient performance in the third quarter with profit before tax of Sh13.2 billion, a 41 percent drop year-on-year on account of revenue reduction and a one-off employee past service cost of Sh2.7 billion, following the Supreme Court ruling on 5 September 2025 and the Retirement Benefits Appeal Tribunal (RBAT) orders,” said StanChart’s chief executive officer Kariuki Ngari.
“I am pleased to inform our stakeholders that we have substantively discharged the orders issued by the Retirement Benefits Authority Tribunal,” he added.
He revealed that, by the end of last week, the bank had discharged Sh1.9 billion out of the Sh2.5 billion awarded to the appellants, following the completion of the verification process.
The sum was paid to 499 of the 629 appellants, indicating an average payout of Sh3.8 million.
The bank did not categorise the one-off payout as an exceptional item, but loaded it on staff costs, which jumped 32 percent to Sh9.1 billion from Sh6.9 billion a similar period last year.
StanChart also felt the pinch from declining interest income from customer loans and lending to other banks, and forex earnings also took a dip.
Interest income from loans fell by 21.3 percent to Sh13.6 billion due to a decline in its loan book accompanied by fall in interest rates.
StanChart’s loan book stood at Sh146.3 billion as at September 2025, down from Sh151.2 billion a year earlier.
Interest income from other lending to other banks fell by Sh2.25 billion, or 44.5 percent, to Sh2.8 billion as high liquidity in the banking sector dampened interbank borrowing.
StanChart’s earnings from forex trading fell by 58.9 percent to Sh2.7 billion from Sh6.6 billion, as a stable shilling denied the bank spreads to capitalise on.
Meanwhile, earnings from lending to the government rose by 30.4 percent to Sh8.7 billion, following increased investment in Treasury bills and bonds as private sector lending lagged.
Interest expenses fell by 32 percent to Sh2.8 billion, attributable to lower interest rate paid on customer deposits, which remained flat at Sh283.4 billion.
In September, StanChart issued a profit warning, signalling that it expects its net profit for the full year ending December 2025 to fall by at least 25 per cent, or Sh5 billion.
