Standard Chartered Bank Kenya(StanChart) has reported a 50.9 % growth in net profit in the half-year period ended 30th June 2021. The performance was attributed to lower operating expenses reported in the group and higher non-interest income.
The lender reported net earnings of Kes 4.8 billion in the half-year period compared to Kes 3.2 billion a year reported during the same period in 2020.
Net loans to customers declined to Kes 130.3 Billion in H1, 2021, compared to Kes 134.3 Billion during the first six months of 2020, resulting in a decline in fees and Commissions earned by the lender from loans to customers to Kes 140.9 Million in H1, 2021 from Kes 152.5 Million recorded at the end of the first six months in 2020
“Loan impairment declined by 61 percent (to Kes 638.5 million) reflecting the work we have done over the last few years to ensure our portfolios are in good shape and resilient to stress and supported by improving macroeconomic variables,” Kariuki Ngari, StanChart’s chief executive.
Net Interest Income in Stanchart fell from Kes 9.4 Billion in 2020 to Kes 9.1 Billion in H1, 2021. Consequently, total shareholders equity remained flat at Kes 51.7 Billion during the first six months.
However, operating expenses in the group were reduced by 15.8 per cent to Kes 7.32 billion. The decline was attributed to reduced provisions for loan defaults and lower spend on staff. Last year, StanChart spent Kes 1.35 billion on the staff retrenchment programme, marking the seventh straight year of cutting staff numbers as it made more investment in digital banking services.
The lender’s balance sheet size grew from Kes 327.2 Billion to Kes 345.6 Billion during the period under consideration.
The group cut provisions for loan losses from Kes 1.6 Billion in 2020 to Kes 638.5 Million in H1, 2021, while profit before tax rose to Kes 6.8 Billion from Kes 5.1 Billion in H1, 2020.
StanChart Outlook and Dividend
StanChart did not declare an interim dividend, noting that the COVID-19 pandemic presents health and economic challenges for the foreseeable future.
However, they expressed optimism in the group’s performance in 2021 saying they expect income to be similar to that achieved in the financial year ended 31st December 2020 on a constant currency basis and to return to their medium-term guidance of 5-7% growth from the financial year 2022.
“The recovery from the COVID-19 pandemic is uneven and volatile, though encouragingly the trends we see as we exit the quarter are more positive in our bigger markets”. StanChart in their press release.
Read also; StanChart Posts 31 Percent Decline in Profits for 3Q2020.
