KENYA – Stanbic Bank has reported a growth in net profit on the back of improved operations.
Group results show the lender made KSh6.38 billion (US$63.8m) after-tax profit for the year ended December 31, 2019, an increase of 2.4 per cent over the KSh6.27 billion (US$62.7m) netted the previous year.
Financial results published yesterday showed improved customer deposits and borrowing that boosted the lender’s earnings. Deposits rose by KSh5.2 billion (US$52m) to KSh224.7 billion (US$2.24m) from KSh219.5 billion (US$2.19m) the previous year.
Borrowings also jumped by KSh2.1 billion (US$21m) to KSh9.1 billion (US$91m) last year from KSh7.1 billion (US$71m) in 2018.
This pushed the group’s revenue to KSh24.7 billion (US$247m) in 2019, from KSh22.1 billion (US$221m) the previous year.
The Kenyan arm of the bank booked KSh6.22 billion (US$62.2m) in profit after tax in the year under review from KSh6.12 billion (US$61.2m) in 2018. The improved performance was attributed to a rise in loans to customers and other income.
Loans increased by KSh3.2 billion (US$32m) to KSh13.9 billion (US$139m) from KSh10.7 billion (US$107m) the previous year. This saw the bank’s net interest income increase by more than KSh1 billion (US$10m) to KSh12.7 billion (US$127m) in the year under review from KSh11.7 billion (US$117m) in 2018.
Total non-interest income jumped to KSh10.8 billion (US$108m) from KSh9.4 billion (US$94m), pushing total operating income to KSh23.6 billion (US$236m) in 2019 from KSh21.2 billion (US$212m) the previous year.
The bank’s loan impairment charges however rose to KSh3.15 billion (US$315m) against KSh2 billion (US$20m) in 2018, in line with the industry-wide performance.
A Central Bank of Kenya report released in November showed that bad loans were at 12.5 per cent in August 2019, as many businesses struggled to stay afloat.
Banks are, however, expected to reap more income from loans following the repeal of the interest rate cap that could spur lending.
The board recommended a final dividend of KSh5.80, having paid an interim dividend of KSh1.25 for each ordinary share.
“If approved, the full dividend per share for the year will be KSh7.05 for each ordinary share of KSh5,” said the directors in a statement.
At the same time, the company’s brokerage business – SBG Securities – reported KSh121.9 million (US$1.22m) in profit after tax from the previous year’s profit of Sh77.1 million (US$0.77m).