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StanChart Bank Kenya posts flat profit of Sh6.5 billion

By Banking Review Reporter

The Standard Chartered Kenya has posted a flat pre-tax profit of KSh6.5 billion in the first half of this year, compared to the same period last year.

The bank said total income increased by eight per cent to Sh11.8 billion helped by a slight increase in interest income.

The lender saw non-performing loans grow to KSh3.8 billion during the period from Sh2 billion. “We continue to have a proactive approach to risk management and remain watchful,” said Richard Etemesi, managing director, Standard Chartered.

Loans and advances increased by 14 per cent to Sh118.4 billion while customer deposits increased by 7 per cent to KSh147.4 billion. “The high interest rates that prevailed for most of 2012 together with the usual notable impact of elections impacted the growth of loans and advances but we have seen good momentum in the last quarter,” Etemesi said.

There was a sharp increase in government securities from Sh36 billion to Sh65.9 billion on the back of what the bank said was growth in customer deposits and overall growth in the balance sheet boosted by capital injection through the rights issue and profit retentions.

Etemesi said business momentum has continued to pick pace compared to the last quarter of 2012 and the first quarter of this year.

“We remain confident in the outlook for the business in the second half of 2013. Our costs are 4 per cent lower than what we achieved in the first quarter as we focus on driving cost efficiencies across the business,” he said.

Standard Chartered trails a number of top-tier banks that have reported double-digit growth in profitability. Equity Bank, second-biggest lender by market value, said first-half profit climbed 17 per cent on increased earnings from loans as banks held borrowing costs at more than double the official rate.

CFC Stanbic Bank posted an 81.7 per cent rise in pretax profit for the second quarter from a year ago to KSh3.24 billion. Co-operative Bank reported a 17 per cent rise in half-year net profit on cheap deposits and lending income.