Standard Chartered Bank of Kenya records a pretax profit rise of 3%
Standard Chartered Bank of Kenya said its pretax profit rose 3 per cent to Ksh 12.2 billion in 2019, as a focus on keeping a lid on bad loans restrained revenue growth. Its operating income was flat at Ksh 28.7 billion, while impairment losses dropped 83 per cent to Ksh 0.6 billion as bad debts were cut, helping to offset the impact of higher expenses.
The lender, which is the fourth largest by assets in Kenya, said its earnings per share edged up 2 per cent to Ksh23.49. The bank boosted its total dividend per share for the year to Ksh20, 5 per cent higher than the previous year.
The government removed a cap on commercial lending rates last November and executives in the industry expect the move to boost loan growth this year when disruption of coronavirus will be over.
The lender also posted a marginal 1.2 per cent growth in profit after tax for the year to Ksh.8.2 billion from Ksh.8.1 billion from a mixed bag of fortunes in operations.
Interest income generated from on lending plunged by 6.3 per cent from lower income from investing in government securities which cancelled out growth in interests from loans and advances.
Both customer loans and Treasury investments were up in the period rising by 3.2 per cent and 8.4 per cent to Ksh.97.7 billion and Ksh.128.7 billion respectively.
Meanwhile non-interest funded revenue streams were flat at Ksh.9.2 billion as lower fees and commissions cancelled each other out with improved income from Forex trading activities.
Nonetheless, the lender marked an improved profile in its cost base as total costs eased slightly to Ksh.35.8 billion from Ksh.36.2 billion from lower staff costs and loan-loss provisioning.
With the recent outbreak of Covid-19 virus going beyond 90 days, the bank says its negative impact on its business will become significant.
Kenya has seven confirmed cases of the COVID-19 virus, and the government has placed measures aimed at reducing its spread, including banning public gatherings and closing all learning institutions.
On Wednesday, The Central Bank of Kenya said all commercial lenders will be allowed to extend the length of personal loans, and those of small and medium enterprises, for borrowers who get into difficulties.
“The disruptions are very clear and that is the real economy out there so I cannot stand here and predict. It is a question of one day at a time,” chief executive Kariuki Ngari told Reuters after a livestreamed investor briefing. The lender is working with its individual clients to help them resolve any challenges,