Standard Chartered Kenya’s net pro it for the nine months ended September.
Standard Chartered Kenya’s net profit for the nine months ended September rose by a third to Sh6.3 billion on higher revenue from government securities, fees and commissions and a fall in provision for bad loans.
The top tier lender, which had made a net profit of Sh4.7 billion in the corresponding period last year, cut its provision for bad loans by half, from Sh3.73 billion last year to Sh1.88 billion this year.
Interest income from government securities went up by 15 per cent to Sh9.5 billion even as the bank’s outstanding stock of securities shrank by Sh10 billion to Sh115.5 billion, indicating a shift to higher-yielding bonds.
The lender however saw a two per cent fall in interest income from customer loans to Sh9.9 billion, continuing a trend that has hit a number of banks this year due to a lower cap on rates and a preference for government lending. Interest expenses rose marginally by two per cent to Sh5.76 billion, while operating expenses fell by 6.7 per cent to Sh12.4 billion largely due to lower provisions for bad loans.
“Non-interest income increased by 10 per cent to Sh7 billion compared to a similar period in 2017 driven by good growth in fees and commissions, foreign exchange income and growth in our wealth management business,” said Stanchart in a statement.
“Interest income on customer
Interest income from government securities went up by 15 per cent
loans and advances declined by two per cent to Sh9.9 billion due to lower average balances coupled with re-pricing in line with the reduction of the Central Bank Rate while interest income from government securities increased by 15 per cent.”
The fall in loan loss provision continues to provide the base for banks’ increasing their profits in the nine month period, with fellow top tier lenders KCB, Cooperative Bank, DTB and Equity Bank all making significant reductions in their loan loss provisions even as the stock of bad loans goes up.
Standard Chartered Bank branch on Kenyatta Avenue, Nairobi.