Standard Chartered Bank Kenya is bracing for a steep decline in profits this year as it sets aside billions to honour a pension settlement owed to former employees.
The lender, one of Kenya’s Tier 1 banks, told investors that its net earnings for the year ending December 31, 2025, will be at least 25 per cent lower than last year’s.
The drop stems from a Ksh 7 billion payout to 629 ex-staff members, following a Supreme Court ruling that upheld an earlier tribunal decision.
“The Tuesday warning means that the lender’s profits will drop by Ksh 7.1 billion or more, compared to the Ksh 28.5 billion reported in 2024, a figure almost similar to what it is awarding former employees in pension compensation,” the bank said.
The Nairobi Securities Exchange immediately reflected the concern. Standard Chartered’s stock fell by nearly Sh15 compared to Monday’s trading and is now about Sh60 below its 52-week high of Sh347.50 set in August. Still, the bank has gained close to 9 per cent this year from its opening price of Ksh 279.75, ranking 49th on the NSE in year-to-date performance.
The payout will wipe out a sizeable portion of last year’s profit. In 2024, the bank reported a net profit of Sh20.1 billion, up from Ksh 13.8 billion in 2023, and distributed a record Ksh 13.9 billion in dividends. Shareholders walked away with Ksh 45 per share, an increase from Ksh 29 the previous year, after the lender posted a 45 per cent jump in net earnings.
Despite the looming financial hit, the lender has sought to reassure investors of its resilience. Board chairperson Kellen Kariuki said, “We would like to reassure our clients and stakeholders that SCBK is adequately capitalised to meet the anticipated obligations.”
Audited 2025 results will be published in early 2026, but analysts warn that the one-off cost could dampen investor sentiment in the short term, even as the bank maintains strong capital buffers.
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