Stanbic Bank Kenya Posts 5% Profit Growth to Ksh3.5B in Q1 2026

Stanbic Bank Kenya has reported a steady performance for the first three months of 2026, posting a 5 per cent increase in profit after tax to Ksh 3.5 billion for the quarter ended March 2026. This compares to Ksh 3.3 billion recorded over a similar period in 2025, reflecting gradual growth supported by stronger lending activity and improved balance sheet expansion.

The lender attributed the improved earnings mainly to higher net interest income, which rose by 12 per cent to Ksh 7.6 billion.

The growth was largely driven by increased lending across key sectors of the economy, with notable demand coming from clients operating in trade, energy, building and construction. A significant portion of this expansion was in foreign currency loans, which continue to play a major role in supporting businesses engaged in cross-border and import-export activities.

During the period under review, Stanbic also reported a 6 per cent rise in loans and advances, while its total balance sheet expanded sharply by 23 per cent, growing from Sh450 billion to Sh552 billion. This expansion was supported by increased customer deposits as well as a recovery in private sector credit demand.

Private sector lending momentum also showed signs of improvement in the broader economy, with credit growth accelerating to 8.1 per cent in March 2026. The improvement points to rising business confidence and increased borrowing appetite among firms as economic activity gradually strengthens.

Renewed economic activity

Commenting on the performance, Abraham Ongenge said the bank had benefited from renewed economic activity and stronger customer engagement.

“We sustained balance sheet growth from mid-2025, reflecting renewed momentum in the Kenyan economy, underpinned by improving market conditions and a rebound in private sector credit,” he said.

He added that deposit growth played a central role in supporting lending activity across the business.

“The double-digit Q1 growth was driven by higher customer deposits reflecting the trust our customers continue to place in our brand, which we efficiently deployed into lending, interbank placements and financial investments,” Ongenge noted.

Despite the positive performance, the banking sector continues to operate under pressure from narrowing interest margins. This has largely been driven by successive monetary policy easing measures by the Central Bank of Kenya over the past year.

The Central Bank Rate declined from 10.75 per cent in March 2025 to 8.75 per cent in March 2026. At the same time, yields on government securities also softened, with the 91-day Treasury bill rate falling from 8.79 per cent in December to 7.40 per cent by March 2026. These shifts have reduced returns on interest-earning assets, putting pressure on banks’ income margins even as lending volumes increase.

To counter these challenges, Stanbic Bank said it focused on tighter cost controls, improved risk management, and continued investment in digital banking platforms, which have become increasingly important in customer acquisition and service delivery.

Dennis Musau said the bank deliberately adjusted its strategy to maintain stability in a lower interest rate environment.

“Despite margin pressures in the first quarter of 2026 stemming from the lower interest rate environment, we responded decisively through disciplined cost and risk management, targeted lending growth, and continued expansion of our digital banking platforms, sustaining balance sheet momentum as private sector credit recovered,” he said.

Overall, the results point to a banking sector that is gradually adjusting to changing monetary conditions, with growth now being driven more by loan volumes, customer deposits, and operational efficiency rather than high interest spreads. Stanbic’s performance mirrors a broader trend in the industry where banks are leaning on diversified income streams and digital transformation to maintain profitability in a shifting economic environment.