Stanbic profit up 14pc as staff lay-offs loom

News of Stanbic Bank of Kenya posting net profit growth of 14 per cent was blighted by reports that the lender was also cutting jobs.

Stanbic recorded a half-year net profit of Sh4.1 billion compared to the previous year’s Sh3.6 billion on the back of improved earnings from its lending activities in the first half of 2019.

A 20 per cent increase in earnings from interest was enough to offset a five per cent jump in operating expenses, as the mid-tier bank continued to enjoy the growth of its loan book.

Income on interest reached Sh6.7 billion between January and July 2019 compared to Sh5.6 billion in the same period in 2018.

Stanbic’s loan book, however, grew by 19 per cent from last year’s level of Sh136.5 billion to stand at Sh161.9 billion, while customer deposits increased by a near-identical 20 per cent to close at Sh201.6 billion, against Sh167.3 billion for the previous comparable period.

“These results are a clear demonstration that we are living up to our purpose in Kenya,” said Stanbic Bank Kenya Chief Executive Charles Mudiwa.

However, the bank’s liabilities might go up after reports that it will put a number of its workers on the chopping board.

Stanbic has come up with a voluntary retirement package through which it expects to part ways with around 255 employees.

The company says it plans to retain the affected employees on the medical scheme in the remainder of the year and to pay salaries in lieu of notice.

“The voluntary early retirement is an outcome of a clear strategy, where we are looking at how to become in the business that we run. But also as digitise, and become more digital it means some functions will have to be re-organised as a result,” said Mudiwa. Stanbic joins a number of banks in the country that have been restructuring their operations in line with a changing economic landscape.

In the telecoms sector, Telkom last week announced that it would send home hundreds of its workers following an impending merger with Airtel Kenya.