NAIROBI,KENYA,NOVEMBER 23 — Standard Chartered Bank (Kenya) has posted a Ksh6.3 billion net profit for the nine months period ended September 30, despite a shrinking loan book and lower customer deposits.
The Nairobi Securities Exchange (NSE) listed lender’s profit is a positive gain (34 per cent up) from Ksh4.7 billion recorded in a similar period last year, as it reaped from investments in government securities, fees and commissions.
The tier-1 lender gained 14.5 per cent on interest income from government securities which totaled Ksh9.5 billion, up from Ksh8.3 billion it recorded in a similar period last year.
Interest from loans and advances to customers however dropped 1.9 per cent to Ksh9.9 billion compared to last year’s 10.1 billion, as the lenders loan book slightly reduced by 1.9 per cent to Ksh111 billion, from Ksh114.2 billion last year.
“Interest income on customer loans and advances declined due to lower average balances coupled with re-pricing in line with the reduction of the Central Bank Rate,” the lender noted.
Total interest income however grew to Ksh20.3 billion from Ksh19.4billion, with the net interest income closing at Ksh14.6 billion, a 5.8 per cent rise from Ksh13.8 billion same period last year.
During the period, customer deposits shrunk 7.9 per cent to Ksh219.5 billion compared to Ksh238.5 billion in a corresponding period last year.
Total interest expenses on the other hand increased to Ksh5.8 billion from Ksh5.6 billion last year on rising costs in customer deposits which consumed Ksh4.9 billion up from Ksh4.7 billion.
Expenses on deposits and placements from banking institutions however reduced to Ksh48.4 million compared to Ksh156.1 million last year.
The lender’s non-interest income grew 9.4 per cent to Ksh7 billion from Ksh6.4 billion. Total operating income went up to Ksh21.6 billion.
Operating expenses totaled Ksh12.2 billion a drop from Ksh13.2 billion as staff costs remained unchanged at Ksh5.1 billion.
Directors emoluments and rental charges dropped to Ksh222.7 million and Ksh391.6 million from Ksh229.5 million and Ksh396.9 million respectively.
Gross Non-Performing Loans (NPLs) however grew by 15.4 per cent to Ksh19.5 billion from Ksh16.9 billion even as the bank significantly reduced its provision for bad loans by48.6 per cent, from Ksh3.7 billion to Ksh1.9 billion.
During the period, insider loan book expanded to Ksh6.5 billion as employees increased their borrowing from Ksh6.2 billion last year to Ksh6.4 billion in the nine months.
Directors, shareholders and associates borrowed Ksh46.5 million up from Ksh45.7 million last year.
A subsidiary of British multinational banking and financial services company-Standard Chartered PLC, StanChart Kenya closed the nine months with a core capital of Ksh35.9 billion, similar level to last year.
Its liquidity ratio closed the period on a strong 69.9 per cent meaning the lender is holding cash that can be spent on other investments, but in a good position to pay short-term obligations without a flinch.
With about 36 branches spread across the country, StanChart total assets stood at Ksh287.6 billion though lower than Ksh309.9 billion it had in a similar period last year.
Other tier-1 banks that have announced results for the nine months include KCB Group which posted a net profit of Ksh18 billion, Equity Group Ksh15.8 billion profit, Co-operative Bank Ksh10.3 billion profit, Barclays Bank of Kenya Ksh5.4 billion net profit and DTB which posted a Ksh5.2 billion net profit.