Stanbic Bank profit edges up slightly

Stanbic Bank’s profit fell 12 per cent in the first half of this year following reduced lending and income from interest on loans.

The bank’s profit for the six months to June stood at Sh1.7 billion, down from Sh1.9 billion last year.

Interest income fell by Sh450 million as the bank cut back on home loans to focus on overdrafts and term loans.

Propped up revenue

“Customer loans and advances grew by seven per cent year-on-year, mainly on term lending,” commented Chief Finance Officer Abraham Ongenge on the bank’s results published yesterday.

The bank’s earnings from fees and commissions propped up revenues outside interest rates charged as well as foreign currency trading, bringing the total non-interest income from Sh3.7 billion in the first half of last year to Sh4.1 billion this year.

“Income from trading decreased from Sh2.2 billion to Sh2 billion due to slow interest rate volatility. This was partly offset by customer foreign exchange volumes increasing by 13 per cent year on year and foreign exchange margins increasing by 48 per cent,” said Mr Ongenge.

Bad loans continued to soar, forcing Stanbic Bank to more than double part of its income to cushioning itself against the non-performing loans from Sh834 million last year to Sh1.8 billion this year. The lender was, however, a beneficiary of capital flight from banks perceived as risky, attracting deposits of Sh130 billion, up from Sh111 billion in the first half of last year. [Otiato Guguyu]