StanChart net profit down 39pc

NAIROBI: Standard Chartered Bank’s net profit for the year ended December 31, 2015 has declined by 39 per cent to Sh6.2 billion.

The results mirror the lender’s profit warning in November last year, which signaled that its profit would dip by at least 25 per cent. In a similar period in 2014, the bank posted a net profit of Sh10.4 billion.

Profit before tax was Sh9.2 billion, down by 36 per cent compared to Sh14.3 billion the previous year. Commenting on the results, StanChart CEO Lamin Manjang, who termed 2015 as a year of considerable challenges and changes, said the drop was attributed to among other factors an increase in non-performing loans portfolio.

“This was due to three factors: an increase in the non-performing loans portfolio; the financial impact of the restructuring from the updated group strategy; and a one-off net capital gain in 2014 relating to the disposal of a property,” he said.

The bank’s interest income grew marginally to Sh22.8 billion from Sh22.1 in 2014. This was supported by deposits and placements that grew by 126 per cent to Sh754 million.

Operating expenses hit Sh16.2 billion up from Sh11.7 billion. The increase was mainly due to a Sh4.9 billion loan-loss provision, a 277 per cent increase compared to 2014’s provision of Sh1.3 billion.

DISPOSAL OF PROPERTY

The lender grew its asset base by five per cent to Sh333 billion while total shareholder equity improved slightly to Sh41.3 billion from last year’s Sh40.6 billion.

Despite the slump in profits, the directors have recommended a final dividend of Sh12.5 per ordinary share. This, added to the interim dividend of Sh4.50 retains the dividend at Sh17 as in 2014. The bank becomes the first bank among the NSE-listed lenders that had issued a profit warning to release results.