This archive report was first published on 26 August 2019.
On August 26, 2019, Standard Chartered Bank of Kenya announced a five percent increase in after-tax profit to Sh4.7 billion in the six months to June 2019.
The bank's ability to cover three quarters of its bad loans has given it space to reduce insurance on non-performing loans, thus cutting provisioning from Sh1.2 billion to Sh378 million.
According to StanChart chief financial officer Ms Chemutai Murgor, the bank's cover ratio is 76 percent above the 35 percent industry average.
However, even as the lender scaled down on provisioning, its bad loans piled up from Sh18.5 billion last year to Sh19.7 billion.
StanChart cut exposure to government paper from Sh116 billion to Sh98 billion and as a result witnessed 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 bank'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 such, the interest paid out to the bank's depositing customers was down from Sh3.3 billion to Sh2.6 billion.
Ms Murgor noted that the bank's cost of funds have remained significantly low since 81 percent of deposit is current and savings contributing to two percent cost of funds.
The lender's new boss Kariuki Ngari said focus will go towards digital partnerships, retail digital bank, and being the primary tax payment channel in the country.
