Stanchart stock gains big ahead of full-year results announcement

Standard Chartered Bank of Kenya last year spent Sh205.63 million on redundancies.

Photo credit: File | Nation Media Group

Standard Chartered Bank Kenya’s share price touched a new 52-week high of Sh160 on Monday as the stock continued to climb ahead of the announcement of the lender's full-year results within the next two months.

The share price closed at an average of Sh153.75, marking a 19.2 percent rally over the past 12 months.

Stanchart is expected to announce a final dividend for the year ended December 2022, having made a record interim payout of Sh6 per share two weeks ago.

The Nairobi Securities Exchange-listed firm paid a total dividend of Sh19 per share for the year ended December 2021.

Despite the recent share price gains, Stanchart remains among the listed companies with a high dividend yield of more than 12 percent.

It is also among the big banks that have recorded strong earnings growth as the economy recovers from the depths of the shocks of the Covid-19 pandemic.

Stanchart made a net profit of Sh8.7 billion in the nine months that ended September, up from Sh6.3 billion a year earlier and marking a 38 percent increase.

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 percent 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 percent 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 percent 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.

Stanchart is among the listed banks that resumed paying interim dividends, joining others like KCB Group, NCBA Group and Absa Bank Kenya.

PAYE Tax Calculator

Note: The results are not exact but very close to the actual.