StanChart profit surges 39pc in first quarter to Sh5.6bn

Standard Chartered Bank Kenya Chief Executive Officer Kariuki Ngari.

Photo credit: File | Lucy Wanjiru | Nation Media Group

Standard Chartered Bank Kenya has posted a 39.4 percent rise in profitability through the first three months to the end of March 2024, with net income at Sh5.6 billion from Sh4 billion previously on higher income from loans and transactions.

The lender’s total operating income rose by 21.4 percent to hit Sh13 billion from Sh10.7 billion with the growth being largely attributable to a faster growth in non-interest funded income by 23.6 percent to Sh4.7 billion.

The growth in non-interest income was supported largely by improved earnings from other fees and commissions and higher forex trading income in the quarter.

Further, the bank’s net interest income has improved by 20.5 percent to Sh8.2 billion from Sh6.8 billion on expanded revenue from lending.

Total interest income for the bank has soared by 26.6 percent to Sh9.5 billion from Sh7.5 billion with revenues from loans and advances hitting Sh5.7 billion from Sh3.9 billion last year implying improved lending margins for the bank in the three months.

Standard Chartered has however seen its costs rise albeit at a slower pace to revenue in the backdrop of rising interest rates.

Total interest expenses for the bank were for instance higher in the period by 71.4 percent at Sh1.2 billion from Sh701 million in March 2023.

The bank paid Sh1 billion to cover term deposits by customers, down from Sh654 million a year prior.

Meanwhile, non-interest related expenses have totaled Sh5.4 billion, a 5.8 percent rise in the costs from Sh5.1 billion last year.

The marginal rise in other expenses was anchored on a slowdown in loan-loss provisioning costs which fell from Sh790.9 million to Sh547.9 million in March 2024.

The bank has made the lower provisions on account of reduced gross non-performing loans which contracted to Sh16.5 billion during the quarter from Sh22.5 billion previously.

During the quarter, Standard Chartered Bank Kenya has grown its net loans and advances to customers by 11.9 percent to Sh153.5 billion from Sh137.1 billion while customer deposits have been largely unchanged at Sh306 billion from Sh302.9 billion.

Standard Chartered’s earnings per share have strengthened to Sh14.42 from Sh10.55 a year ago, on the back of the improved profitability.

The bank joins a growing list of lenders to have increased their profitability in the last three months largely as a factor of higher revenues amid growing loan-loss provision costs in response to rising non-performing loans.

KCB Group for instance reported a 69 percent growth in net profit to Sh16.06 billion for the first quarter ended March 2024, which saw it overtake Equity Group for the first time in four years.

On its part, Equity Group posted a 25 percent rise in first quarter profit to Sh15.3 billion even as the bank beefed up its cover for dud loans by 50 percent to Sh6 billion from Sh3.4 billion previously.

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