This archive report was first published on 17 November 2021.
StanChart Bank Kenya, a subsidiary of Standard Chartered Bank with its headquarters in the United Kingdom, has seen a significant improvement in its financial performance. According to its latest financial results, the bank recorded a net profit of KSh 6.36 billion at the end of the first nine months of 2021, a 46.7% increase from KSh 4.3 billion in Q3 2020.
Despite a slight decline of 1.61% in loan loss provisions from KSh 2.7 billion in Q3 2020 to KSh 2.6 billion, the bank's loan book remained flat at KSh 131.7 billion during the period under review. However, customer deposits rose from KSh 242.8 billion to KSh 258.4 billion at the end of September 2021.
Net interest income also saw an increase from KSh 14.3 billion in Q3 2020 to KSh 14.7 billion at the end of the first nine months of 2021. Total operating income rose from KSh 20.7 billion to KSh 22.3 billion during the period under consideration, a 7.84% increase.
Basic and diluted earnings per share improved from KSh 11.13 in Q3 2020 to KSh 16.49, a 48.16% change. The bank's pre-tax profit also improved by 35.53% from KSh 6.6 billion to KSh 8.9 billion during the period under consideration.
StanChart Bank Kenya's investment in government securities decreased by 8.12% from KSh 102.3 billion in Q3 2020 to KSh 94 billion at the end of September 2021. The bank's balance sheet size grew from KSh 314.4 billion to KSh 330.7 billion, a 5.19% increase.
Total shareholders' equity increased by 5.77% from KSh 50.2 billion to KSh 53.1 billion in Q3 2021. The bank's directors have proposed to pay a dividend amounting to KSh 1.97 billion to shareholders, compared to nil payment in Q3 2020.
According to ABYAXYS Africa Research, StanChart Bank Kenya has recorded improved efficiency, attributed to the use of digital channels. However, there are concerns about the lender's flat loan book growth and worsening non-performing loans portfolio, given the improved lending environment.
As stated in its outlook, ABYAXYS Africa Research expects future growth in the bank's earnings to be driven by digital channels, including offerings in financial markets and wealth management services. The announcement of an interim dividend is also expected to make the counter attractive in the coming days.
