Standard Chartered Group Kenya has recorded a 5.61 percent growth in pre-tax profits to KShs 6.9 billion for the six months ended 30 June 2019 in what the Chief Financial Officer, Chemutai Murgor termed as ‘improved profitability and strong capital.’
The Bank has a strong capital growth which stands at 18.55 percent, higher than the 14 percent of the regulatory environment, the CFO said that the bank is highly dependant on customer deposits and it has a liquidity ratio of 67 percent.
“We have delivered a year-on-year improvement in performance as we continue to pursue sustainable growth for the long-term, “part of the statement released by the bank said.
The bank attributed lower comparative rates to the flat interest income from customer loans and advances, the net interest income declined 7 percent to KShs 12.7 billion.
“Our cost of funds has remained significantly low since 81 percent of the deposit is current and savings contributing to two percent cost of funds,” the CFO said.
It further says that the flat net interest income was “driven by lower average investment in government securities in the current period coupled with declining yields. “
“Total interest expense decreased by 26 percent to KShs 2.9 billion from proactive management of the balance sheet,” the bank said.
The lender’s customer deposits increased by 2 percent to KShs 229 billion compared to KShs 224 billion in December 2018, this was driven by higher customer account balances supported by new channels.
Gross non-performing loans at KShs 19.8 billion are down 9 percent from the end of 2018. “Overall credit quality remains stable as we continue to focus on the quality of the balance sheet. The cover ratio of 67 percent remains above the industry average of 35 percent,” the bank said.
The lender has increased investments in technology, cybersecurity, and staff which pushed total operating expenses up by 6 percent.
In a new move, the bank, which is mainly known for corporate deals has set aside Kshs 500 million towards digital banking partnerships, retail digital bank and being the primary tax payment channel in the country.
The newly appointed CEO, Kariuki Ngari, however, noted that the bank is battling several shocks in the industry including the tough regulatory environment, the ever-changing digital space which in effect frequently affects customers’ needs.
“We are putting even greater focus on our clients and customers to build deep and long-standing relationships. We are investing in our solution offerings to enhance the client experience, strengthen information and cybersecurity, and combat financial crime,” he said.
Featured Image Courtesy: Standard Chartered