Standard Chartered nine months profit falls by 31 per cent

Standard Chartered nine months profit falls by 31 per cent

Standard Chartered Bank Kenya has reported a 30.6 per cent profit decline to Ksh.4.3 billion in nine months of operations to September 30.

The significant profit decline is attributable to higher costs of covering potential loan defaults by customers (loan-loss provisions) and falling operating income.

The bank’s total operating costs surged by 4.7 per cent to Ksh.17.7 billion as loan-loss provisions grew three fold to Ksh.2.7 billion from Ksh.728.2 million last year.

The higher defaults cover came as the bank’s stock of gross non-performing loans (NPLs) widened by 10 per cent to Ksh.22 billion from a flat Ksh.20 billion.

Meanwhile, Standard Chartered has seen its total operating income decline by 4.2 per cent to Ksh.20.7 billion billion on lower interest and non-interest revenues in the period.

The bank saw its net interest income decline by 2.7 per cent to Ksh.14.3 billion while non-interest funded income (NFI) fell to Ksh.6.3 billion from Ksh.7 billion last year.

The lender has nevertheless termed the performance as resilient against a tough operating environment which has seen peers suffer a similar trend of profit decline from riskier customer profiles.

“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.

Standared Chartered’s balance sheet however remained on an expansionary trend with both issued loans and customer deposits improving to Ksh.131.7 billion and Ksh.242.8 billion respectively.

The profit dip has however trimmed the bank’s earnings per share to Ksh.11.13 from Ksh.16.15 last year.

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