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StanChart’s Half-Year Profits Dip 31% on COVID-19 Disruption

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Standard Chartered Bank Kenya Limited on Tuesday reported a 31% decline in profits for the half-year ended June 30, 2020 to Ksh3.2 billion compared to Ksh4.7 billion posted at the same period the previous year.

The decline in profits is attributable to poor performance of the equities markets and the COVID disruption that has ravaged Kenyan banks save for Family Bank which is the only lender thus far to record an uptick in profits during the period under review.

In what follows a trend in the banking industry at the moment, StanChart has already prepared for turbulence ahead by accounting for a higher loan loss provision, setting aside Ksh1.6 billion for this particular purpose up from Ksh278.9 million, following in the footsteps of Equity and Co-op Bank(s) who have made similar moves.

The group’s balance sheet rose to Ksh327.1 billion from Ksh294.5 billion even as liabilities adjusted up marginally to Ksh275.5 billion from Ksh247.7 billion.

Interest income earned during the period also ticked down from Ksh11.93 billion down from Ksh12.73 billion. The revenue earned in H1 2020 was lifted by loans and advances which raked in Ksh6.3 billion as government paper yielded Ksh4.7 billion.

Non-interest income sources also yielded lower earnings as the lender closed the first half of 2020 having raked in Ksh4.4 billion down from the Ksh4.7 billion posted last year.

Fees and commissions on loans and advances brought in Ksh152.5 million while forex trading revenue stood at Ksh2.1 billion.

Standard Chartered Bank Chief Executive Officer Kariuki Ngari however prefered to concentrate on the positives stating that the expansion of the balance sheet is an indication that the lender is on the right track.

On the brighter side, the lender managed to cut back on its total bad loans which shrunk marginally to Ksh12.61 billion from Ksh 12.64 billion.

“Performance to June is muted but we are pleased with the outcome with customer deposits and assets both growing by 12 per cent from a similar position last year. We remain watchful as we get into H2 and aim to continue supporting our clients as they get out of the moratorium period and support the ongoing recovery of the economy as the country opens up for full business,” he said.

Consequently, the bank did not declare an interim dividend and instead prefers to conserve cash due to the uncertain business climate as Earnings Per Share (EPS) reduced to Ksh9.17 in H1 2020 from Ksh13.46.

See Also>>>>> Stanbic Holdings Half-Year Profit Shrinks by 37% to Sh2.6 billion

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