Standard Chartered Bank Kenya has reported a 30.6 per cent decline in profit at Kes.4.3 billion for the nine month period ended 30th September 2020.
The company has attributed the profit decline to higher loan-loss provisions and a decline in operating income.
The bank’s total operating costs surged by 4.7 per cent to Kes.17.7 billion as loan-loss provisions grew three fold to Kes.2.7 billion from Kes.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 Kes.22 billion from a flat Kes.20 billion.
Meanwhile, Standard Chartered has seen its total operating income decline by 4.2 per cent to Kes.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 Kes.14.3 billion while non-interest funded income (NFI) fell to Kes.6.3 billion from Kes.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.
Standard Chartered’s balance sheet however remained on an expansionary trend with both issued loans and customer deposits improving to Kes.131.7 billion and Kes.242.8 billion respectively.
The impact of Covid-19 has hit bank profits amid a spike in defaults with the profit dip trimming the bank’s earnings per share (EPS) to Kes.11.13 from Kes.16.15 last year.