This archive report was first published on 26 August 2019.
Published on August 26, 2019, Standard Chartered's after-tax profit rose five percent to Sh4.7 billion in the six months to June, driven by reduced provisioning for bad loans.
The lender's ability to cover three-quarters of its bad loans has given it space to reduce insurance on non-performing loans, cutting provisioning from Sh1.2 billion to Sh378 million.
StanChart's chief financial officer, Ms Chemutai Murgor, attributed the lender's success to its high cover ratio, which stands at 76 percent above the industry average of 35 percent.
However, despite the lender's success, bad loans piled up from Sh18.5 billion last year to Sh19.7 billion.
StanChart also cut exposure to government paper from Sh116 billion to Sh98 billion, resulting in a decline in interest income from securities from Sh6.4 billion to Sh5.4 billion in the period.
Despite the decline in interest income, the lender's focus on expenses moved to customer deposits, which saw a decline in interest-earning deposits from Sh230 million last year to Sh228 billion.
As a result, the interest paid out to the bank's depositing customers was down from Sh3.3 billion to Sh2.6 billion.
Ms Murgor also noted that the lender's cost of funds has remained significantly low, at two percent, due to 81 percent of deposits being current and savings accounts.
StanChart's new boss, Kariuki Ngari, has emphasized the lender's focus on digital partnerships, retail digital banking, and being the primary tax payment channel in the country.
