Standard Chartered Bank Kenya grew its assets under management by 13 percent to Sh148 billion in 2022, helped by rising demand by Kenyans for alternative investments such as fixed income and mutual funds offered on the platform.
The bank earned Sh4.26 billion from the wealth unit during the year, up by 35 percent from Sh3.16 billion in 2021, highlighting the growing importance of the segment towards its non-funded income, which was up 19.6 percent growth to Sh11.3 billion.
The growth points to an increasing number of wealthy Kenyans who are turning to professional fund managers to look after their money, banking on professional expertise to cut risk and identify the best investment options.
The shift has also been informed by the relatively flat performance of other traditional asset classes such as equities and property in recent years due to factors such as Covid-19.
“People are diversifying, and are conscious that they do not want to put all their funds say in a fixed deposit or savings account … we have seen a balance between existing clients who have continued to grow their wealth, and also new ones coming in,” said Standard Chartered Kenya chief executive officer Kariuki Ngari.
The assets have grown at an annual compound rate of 34 percent from Sh19 billion in 2016. Expansion of the wealth division offers StanChart an opportunity to grow and diversify earnings, with the business offering more stable revenue.
It also serves to build synergies with the banking operations, with the institution having catered to affluent clients for decades.
Last year, the lender also introduced an online money market fund known as SC Shilingi Fund, which has attracted customers seeking investments of as low as Sh100.
The fund ended last year with assets under management of Sh1.27 billion, with the lender saying on Tuesday that 89 percent of those taking it up are new to investing through such products.
These alternative products also reflect the drive by banks to diversify their income mix beyond the traditional lending business and to protect their bottom line amid increased competition in the sector.
In the year to December, Stanchart reported that its net profit grew by 38 percent to Sh12.44 billion, driven by higher interest income and revenue from foreign exchange trading.
The lender also announced a final dividend of Sh16 per share following the improved financial performance —taking its total dividend payout for the year to Sh22 per share (2021: Sh19) when the Sh6 per unit interim dividend paid out in December is factored in.
The lender is now set to distribute a total of Sh8.31 billion of its net earnings for the year in dividends (inclusive of the interim payout), representing a payout ratio of 67 percent for the financial year.
For the 2021 financial year, the total distribution stood at Sh7.18 billion, representing an 80 percent payout ratio.
