Standard Chartered Bank Kenya Plc on Friday reported a 30% reduction in profits for the nine months ended September 30, 2020, to Ksh4.3 billion compared to Ksh6.2 billion posted at a similar period the previous year on higher loan loss provision.
The group’s unaudited financial results show that the lender’s loan provision increased almost fourfold from Ksh728.2 million to Ksh2.7 billion signalling that the bank has fallen back to the cautious option in light of the disruption caused by the pandemic.
Operating income shrank slightly to Ksh20.6 billion from Ksh21.6 billion as total operating costs adjusted up by 4.7 per cent to Ksh.17.7 billion.
Loans and advances to customers increased to Ksh131.6 billion from Ksh118.5 billion. During the period under review, the balance sheet swelled to Ksh314.4 billion from Ksh289 billion.
Conversely, customer deposits increased to Ksh3.9 billion from Ksh3.3 billion.Liabilities also ticked up to Ksh265.2 billion from Ksh243.3 billion
The group’s interest income fell 5.8% to Ksh17.9 billion down from Ksh19 billion. Non-interest income fell to Ksh6.3 billion from Ksh7 billion.
The lender’s stock of bad loans (Non-Perfoming Loans) increased to Ksh22 billion up from Ksh20 billion.
The lender also lent out some Ksh6.9 billion to insiders: Ksh102.5 million to directors, shareholders and associates and another Ksh6.8 billion to employees compared to Ksh6.8 billion lent out to these two sets of publics the previous year.
As a result of the financial performance, Earnings Per Share have fallen to Ksh.11.13 from Ksh.16.15 last year.
StanChart Kenya Chief Executive Kariuki Ngari however remained upbeat that the lender has been resilient despite testing times that have shaken the financial sector.
“The Bank delivered resilient performance despite the extraordinary external environment. We are controlling costs to fund investments, and we believe we are well provided against loan impairment. We are further streamlining our business to sharpen focus on our retail business, more effectively leverage our unique network and drive efficiencies,” said Standard Chartered Kenya Group Chief Executive Officer Kariuki Ngari.