Stanbic Bank profit rises to Sh6.4 billion

Stanbic Bank has reported a growth in net profit on the back of improved operations.

Group results show the lender made Sh6.38 billion after-tax profit for the year ended December 31, 2019, an increase of 2.4 per cent over the Sh6.27 billion netted the previous year.

Financial results published yesterday showed improved customer deposits and borrowing that boosted the lender’s earnings. Deposits rose by Sh5.2 billion to Sh224.7 billion from Sh219.5 billion the previous year.

Borrowings also jumped by Sh2.1 billion to Sh9.1 billion last year from Sh7.1 billion in 2018.

This pushed the group’s revenue to Sh24.7 billion in 2019, from Sh22.1 billion the previous year.

The Kenyan arm of the bank booked Sh6.22 billion in profit after tax in the year under review from Sh6.12 billion in 2018. The improved performance was attributed to a rise in loans to customers and other income.

Loans increased by Sh3.2 billion to Sh13.9 billion from Sh10.7 billion the previous year. This saw the bank’s net interest income increase by more than Sh1 billion to Sh12.7 billion in the year under review from Sh11.7 billion in 2018.

Total non-interest income jumped to Sh10.8 billion from Sh9.4 billion, pushing total operating income to Sh23.6 billion in 2019 from Sh21.2 billion the previous year.

The bank's loan impairment charges however rose to Sh3.15 billion against Sh2 billion in 2018, in line with the industry-wide performance.

A Central Bank of Kenya report released in November showed that bad loans were at 12.5 per cent in August 2019, as many businesses struggled to stay afloat.

Banks are, however, expected to reap more income from loans following the repeal of the interest rate cap that could spur lending.

The board recommended a final dividend of Sh5.80, having paid an interim dividend of Sh1.25 for each ordinary share.

“If approved, the full dividend per share for the year will be Sh7.05 for each ordinary share of Sh5,” said the directors in a statement.

At the same time, the company’s brokerage business – SBG Securities – reported Sh121.9 million in profit after tax from the previous year’s profit of Sh77.1 million.