Stanbic Holdings records a 13.4 p.c dip in full year pretax profit
Stanbic Holdings PLC’s has recorded a 13.4 percent dip in its pre-tax profit during the financial year ended December 31, 2019, to Ksh7.7 billion from Ksh8.9 billion that was recorded for the same period in 2018.
The drop in profits was attributed to a 55 percent increase in provision for bad debt that grew to Ksh3.1 billion in 2019 from Ksh2 billion in 2018.
Stanbic bank, the major arm of Stanbic Holdings saw its loan loss provision figures grow to Ksh2.6 billion in 2019 from Ksh1.7 billion in 2018.
Last year, the lender announced a layoff of up to 88 staff, a move that was reflected in its staff costs that slightly dropped from Ksh5.59 billion in 2018 to Ksh5.56 billion in 2019. The bank’s net interest income, however, grew by 8% to Ksh12.7 billion from Ksh11.7 billion in 2018.
Stanbic Bank’s Chief Executive Charles Mudiwa attributed the growth in revenue to several factors among them balance sheet growth within personal and business banking and growth in market share in the brokerage business.
It was also influenced by an increase in transactional fees and the closure of key deals in investment banking.
Profitability was also driven by net interest income, which grew by 10 percent, driven by improved margins within personal and business banking and a decrease in the cost of funds.
During the period under review, customer loans and advances grew by 4 percent year on year to Ksh152.8 billion.
Stanbic Holding’s brokerage arm SBG Securities continued to report solid growth in income posting a 58 percent increase in profit after tax at Sh122 million.
Mudiwa said the bank will continue to focus on deepening client relationships and improving customer service whilst at the same time improving operational efficiency.
“We hope to build on this in 2020 to continually deliver better returns to our shareholders, unmatched service to our clientele and ultimately, to move the Kenyan economy forward.” Said Mudiwa.
Owing to the improved performance, shareholders will earn a final dividend of Ksh5.80 after an interim dividend of Ksh1.25 for each ordinary share of Ksh5.
This brings the total dividend to Ksh7.05 representing a 22 percent increase from last year.