StanChart targets Sh222m from sale of iconic property


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

Standard Chartered Bank Kenya #ticker:SCBK is seeking to sell its iconic Treasury Square building in Mombasa valued at Sh222 million and which houses its first branch in the country that was opened in 1911.

The transaction is expected to earn the lender significant capital gains, contributing to its income in the current financial year. Treasury Square, gazetted as a heritage site, is a freehold property.

“The property was designated as held for sale in June 2020. Due to the impact of Covid-19 management has not been able to sell the asset within one year from the date of the initial sale decision,” StanChart says in its latest annual report.

“As the circumstances were beyond the group’s control, in line with the group’s accounting policy the asset has been retained as held for sale at 31 December 2021. Management remains committed to selling the property.”

StanChart joins other companies in selling properties, including Sanlam Kenya.

The bank did not say whether it will keep the branch at Treasury Square after selling the property.

StanChart has closed scores of branches over the past decade, saying it will now prioritise locations with significant traffic as it seeks to grow its retail client base.

The bank has also invested heavily in digital banking solutions, reducing the need to expand brick-and-mortar operations.

“Our goal is to scale the business profitably, powered by digitisation and partnerships,” Stanchart’s chief executive Kariuki Ngari said of the bank’s mass retail strategy.

“We now have a range of proven digital capabilities, enhanced data analytics, and our remodelled risk framework has been thoroughly stress-tested, which means we can substantially and economically scale up our mass retail presence.”

The lender says more than 92 percent of its institutional clients rely on its digital banking platform Straight2Bank for various services including payments.

StanChart’s net income rose by two-thirds to Sh9 billion last year from Sh5.4 billion a year earlier.

The profit growth was driven by lower costs and higher non-interest income. Loan loss provision shrunk by Sh1.8 billion to Sh2 billion, contributing to operating expenses falling 17.2 percent to Sh16.5 billion.

Non-interest income including fees rose by a quarter to Sh10.3 billion.

Total interest income, however, shrunk by Sh1.4 billion to Sh22.2 billion as the bank reduced its investment in government debt securities.

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