Companies

StanChart Q3 net profit jumps to Sh6.4bn

ngari

Standard Chartered Bank Kenya chief executive Kariuki Ngari. PHOTO | NMG

Standard Chartered Bank Kenya #ticker:SCBK has reported a 46.7 percent jump in net profit for the nine months to September, helped by an increase in foreign exchange earnings and reduced operating expenses.

The Nairobi Securities Exchange-listed bank recorded Sh6.35 billion in profit after tax from Sh4.33 billion posted in a similar period last year.

The growth has been attributed to a 33.8 percent rise in foreign currency trading to Sh2.53 billion, helping shore up the non-interest income.

The non-interest income, which also includes fees and commissions from the bank and mobile banking transactions, increased by 19.1 percent to Sh7.56 billion.

High demand for dollars by traders after the reopening of the global economy and muted credit extension to the private sector due to Covid-19 uncertainties has seen commercial banks direct their cash to risk-free investments like government securities.

Read: Top banks grow lending to State by Sh132.8 billion

StanChart net interest income, largely from loans and advances, increased by 2.8 percent to Sh14.71 billion.

Total income grew by 7.8 percent to Sh22.72 billion, while operating expenses dropped by 5.1 percent to Sh13.37 billion, largely due to a 10.2 percent drop in staff costs to Sh4.88 billion.

The bank last year spent Sh1.35 billion to lay off some 200 staff. The lender also closed eight branches in May.  

Most banks are yet to resume lending to the private sector despite the steady recovery of the economy compared to last year. The lenders made huge loan provisions following the economic fallout, but have since reduced them amid increased loan recoveries.

StanChart’s net loans and advances increased marginally by 10 basis points to Sh131.74 billion, while customer deposits grew by 6.4 percent to Sh258.37 billion.

Non-performing loans rose by 4.8 percent to Sh23 billion.

StanChart has declared an interim dividend of Sh5 per share.

The lender paid out a final dividend of Sh10.50 per share despite a fall in profits for the full year ended December 31 to Sh5.44 billion.