Stanbic Bank profit more than doubles to Sh3.4b
SEE ALSO :Banks up lending to ‘risky’ borrowersIncome from loans rose by Sh996 million despite Central Bank of Kenya lowering its benchmark on lending in March this year by 0.5 percentage points. Loans to customers were up 16 per cent to Sh136 billion. Cheap loans to directors, however, shot up from Sh937 million to Sh5.1 billion or a 447 per cent increase in insider loans. Total interest income including money from buying government paper was up Sh1.2 billion even as rates on treasuries remained muted over the rate cap. Fees, commissions and forex trading also grew by Sh1.2 billion bringing the cumulative revenues to Sh10.8 billion up from Sh9 billion in a similar period last year. On the other hand, expenses tanked from Sh6.7 billion to Sh5.4 billion mostly on reduced cash to insure bad loans and payment to directors which was down from Sh143 million to Sh38 million.
SEE ALSO :Dry spell takes a toll on firmsReduction in provisioning comes as a surprise given that non-performing loans have actually risen from Sh6.4 billion to Sh10.5 billion. “The reversals in impairment reflect the quality of assets and performing books, we made some provisions in 2017 but have adjusted provisions depending on recovery milestones and inflow levels,” Mr Ongenge said. The lender continued to build affordable funding through deposits which grew by Sh34 billion in the half year to Sh164 billion. This has informed its board’s decision to launch agency banking as it seeks to expand beyond its corporate market to penetrate counties.