Standard Chartered Kenya posted a sharp rise in profit for the nine months to September 2018, with net earnings climbing to Sh6.3 billion from Sh4.7 billion in the same period in 2017.
The bank said the improvement came from stronger non-interest income, higher returns from government securities and a steep reduction in provisions for bad loans. Its loan-loss charge fell to Sh1.88 billion from Sh3.73 billion a year earlier.
Income from government securities increased 15 per cent to Sh9.5 billion, even as the lender reduced its holdings by Sh10 billion to Sh115.5 billion. The shift suggested a move toward higher-yielding bonds.
Interest income from customer loans fell 2 per cent to Sh9.9 billion. Standard Chartered linked the decline to lower average balances and repricing after the Central Bank Rate was reduced. Interest expenses rose 2 per cent to Sh5.76 billion.
Operating expenses eased 6.7 per cent to Sh12.4 billion, helped by the lower provisioning charge. Non-interest income rose 10 per cent to Sh7 billion, supported by fees and commissions, foreign exchange earnings and growth in wealth management.
The lender’s gross non-performing loans increased by Sh2.5 billion to Sh19.5 billion, even as the provision for bad loans fell. Its overall loan book also shrank by Sh3.2 billion to Sh114.2 billion by the end of September compared with the same period in 2017.
Standard Chartered said it remained selective in lending as it sought to grow its balance sheet in a safe and sustainable way.
The results came as other tier-one lenders, including KCB, Cooperative Bank, DTB and Equity Bank, also reported lower loan-loss provisions despite rising bad loans. Barclays was the only one of the six tier-one banks that had reported at the time to post a higher provision.
