Stanchart net profit rises 17pc to Sh8.1bn

Standard Chartered Bank Kenya #ticker:SCBK has announced a 17 per cent jump in net profit to Sh8.1 billion, putting it on track with other tier-one lenders whose earnings for the year to December 2018 have risen.

The profit, a rise from previous year’s Sh6.9 billion, was supported by growth in both interest and non-interest income as costs reduced on less loan loss provisioning.

“We are investing in exciting new digital and other transformative initiatives, and our strengthened risk discipline is paying off.

“We are determined to drive commerce and help our clients achieve prosperity in a sustainable manner,’’ CEO Kariuki Ngari on the performance.

Total interest income increased by 2.3 per cent to Sh26.87 billion, hugely supported by interest from government securities.

Non-interest income, largely generated from fees and commission was up 4.6 per cent to Sh9.2 billion.

Operating costs dropped by three per cent to Sh16.7 billion as the bank cut loan loss provisioning by 54 per cent to Sh1.93 billion.

This continues the trend that has been seen with banks such as KCB, Stanbic bank and Cooperative bank, all having trimmed their provision for toxic debt.

The onset of International Financial Reporting Standard saw many banks choose to pass their non-performing loans (NPLs) through reserves as opposed to the income statement.

Loans and advances to customers declined by six per cent to Sh119 billion compared to Sh126 billion at the end of 2017.

The board says that this was in bid to improve asset quality. However, gross NPLs rose by 23 per cent to Sh21.7 billion.

Against this performance, the board has recommended to shareholders the payment of a final dividend of Sh14 per ordinary share. An interim dividend of Sh5 per share was paid last year.

The total dividend therefore will be Sh19, surpassing the Sh17 per share payout of the previous year.

Holders of preference shares, usually non-redeemable and non-voting, will receive dividend at the rate of six per cent on the issue price of each share.

“The board recognises the importance of dividends to shareholders, and believes in balancing returns with investment to support future growth, whilst at the same time preserving strong capital ratios,” said Mr Ngari.