StanChart ousts Barclays as most profitable foreign bank in Kenya

Ann Mutahi, chair of Stanchart Kenya Board and CEO Lamin Manjang discuss the bank’s financial results Tuesday.  [PHOTO: COURTESY]

By JACKSON OKOTH

NAIROBI, KENYA: Standard Chartered Bank of Kenya pushed to top spot as Kenya’s most profitable foreign owned bank. It posted a 16 per cent increase in pre-tax profit to Sh13.4 billion compared to Sh11.6 billion recorded the previous year.

This position was previously occupied by Barclays Bank of Kenya, which has since dropped to position four on the profitability table.

Stanchart becomes the third most profitable bank in Kenya after Equity Group, whose pre-tax profits hit Sh19.15 billion. Perched at the top of Kenya’s banking business is state-owned Kenya Commercial Bank (KCB), which made a pre-tax profit of Sh20.1 billion, dislodging Equity Group.

While lenders KCB and Equity are relying on their huge local and regional networks and customer base, Stanchart has matched these strengths with an equally huge balance sheet valued at Sh220 billion and global presence.

“We delivered against a balanced scorecard of growth, performance, cost control and risk management,” said Lamin Manjang, CEO and managing director, Stanchart Kenya. The bank’s loan book grew to Sh129.7 billion compared to Sh112.7 billion while customer deposits rose to Sh154.7 billion in 2013 compared to Sh140.5 billion the previous year.

TALENT WAR

The amount of cash that was put in Government paper, a lucrative avenue for most banks rose to Sh53.1 billion by December 2013 from Sh42.4 billion in the previous year. Total operating costs grew by 11 per cent to Sh9.5 billion compared to Sh8.6 billion as the bank pumped more cash into infrastructure, technology and talent to support its growth.  “Talent is limited in this market and competition is high, making this aspect one of the items on the risk landscape,” said Manjang. The last few years has seen intense talent war within the banking sector, from foreign exchange dealers to chief finance officers.

Stanchart is focusing its attention on Kenya’s nascent oil and gas sector, power generation projects and upgrading of the various transport networks to drive its wholesale banking business this year. While the bank opened four physical branches last year, it will shift focus to the digital space by expanding Internet and mobile banking platforms.

“We have a firm grip on liquidity and capital as well as global capabilities and asset quality to drive our performance this year,” said Anne Mutahi, the bank’s chairperson. The board recommended the payment of a final dividend for the year of Sh14.50 for every ordinary share of Sh5 subject to approval by shareholders.

This compares to Sh12.50 per ordinary share in 2012.