Standard Chartered Bank Kenya Limited has announced an impressive financial performance for the first half of 2024, showcasing robust growth despite a challenging economic landscape. The bank’s profit before tax surged by 50% to KShs 14.5 billion, underscoring the effectiveness of its strategic initiatives and strong operational discipline.
CEO Kariuki Ngari expressed confidence in the bank’s performance, stating, “We delivered a strong set of results for the first half of the year with profit before tax up 50 percent to KShs 14.5 billion. Our top-line recorded growth of 25 percent, supported by continued momentum that saw strong growth in Non-Funded Income (NFI) from increased transactional volumes, as well as strong net interest income. Good cost discipline has enabled us to generate significantly positive cost-income jaws of 16 percent. Our business remains well-capitalized, highly liquid, with a high-quality funding mix which has allowed us to support clients during the period.”
Key Financial Highlights:
- Operating Income: Increased by 25%, driven by a 19% rise in net interest income due to volume growth and improved margins. Non-interest income surged by 36%, fueled by higher transactional volumes.
- Operating Expenses: Rose by 9%, primarily due to increased staff costs and ongoing investments in digital capabilities.
- Loan Impairment: Charges decreased by 23%, reflecting improved portfolio metrics and the culmination of years of actively working with clients to navigate a challenging operating environment.
A Strong and Liquid Balance Sheet:
- Net Loans and Advances: Decreased by 8% from December 2023, primarily due to foreign currency revaluation amid a strengthening Kenya Shilling. Asset quality improved, with the non-performing loans ratio dropping to 8.4% from 9.7%.
- Customer Deposits: Fell by 19%, largely due to foreign currency revaluation and a reduction in local currency deposits. However, the bank’s funding quality remains strong, with current and savings accounts constituting 96% of total customer deposits.
- Liquidity Ratio: Stands at a robust 63.2%, significantly above the regulatory requirement of 20%.
- Capital Position: The total capital ratio is at 18.87%, well above the regulatory minimum, positioning the bank to continue supporting its strategic objectives.
Dividend Announcement:
Reflecting the strong financial results, Standard Chartered Kenya’s Board of Directors has declared an interim dividend of KShs 8.00 per share. The dividend will be paid to shareholders registered by the close of business on September 18, 2024, with payment scheduled for October 8, 2024. The Board emphasized its commitment to delivering sustainable returns to shareholders.
Outlook and Strategy:
Concluding the announcement, Ngari acknowledged the macroeconomic challenges but expressed confidence in the bank’s strategy. “We are conscious of the external macroeconomic headwinds, both global and local, but we believe we have the right strategy and are uniquely positioned to take advantage of the growth opportunities that arise while proactively managing the risks.”
Ngari also praised the dedication of Standard Chartered Kenya’s employees, highlighting their role in achieving these results. “Their impressive dedication to serving our clients and impacting our communities reinforces our brand promise of being here for good,” he remarked.
This strong mid-year performance positions Standard Chartered Kenya well to continue its growth trajectory and maintain its commitment to supporting its clients and shareholders amid a volatile economic environment.
