StanChart says new rules allow different report

Standard Chartered Bank of Kenya has explained differences in two sets of financial statements released in the last one month.

Yesterday, the top-tier bank clarified there are two publishing requirement for banks, which made it necessary to have different treatment of figures in the statements it published this week from what it had released in March.

In a statement, the bank said it is now fully compliant in publishing its results in line with CBK and IFRS requirements.

Standard Practice

The lender said the Central Bank of Kenya (CBK) requires all banks to publish their audited annual financial statements by March 31, 2016, which must be presented in a format provided by the regulator.

“Kenyan Companies Act requires publication of audited summarised financial statements that comply with International Financial Reporting Standards (IFRS) at least 21 days before an AGM is held.

This requirement applies to companies from all sectors and are not restricted to banks. The summarised financial statements published in the newspaper are derived from the audited group financial statements and annual report,” the bank said.

It added: “There are some minor differences in the treatment of certain items for the CBK and the IFRS requirements, although the total reported profit stays the same. This is the standard practice in the banking industry, and is not due to any change in CBK requirements.”

For instance, the statement sent to the Nairobi Securities Exchange (NSE) on March 23, had indicated that the bank’s net interest income for the year ending December 2015 was Sh18.116 billion. This was a slight increase from Sh17.9 billion recorded in 2014.

In the latest statements, the bank placed its net interest income for the year ended December 2015 at Sh17.6 billion compared to Sh17.3 billion reported in 2014, to reflect an increase of Sh300 million.

The new figure is Sh514 million less what was reported earlier.

It had the effect of changing the operating income of the bank, from the Sh25.1 billion earlier reported to Sh24.8 billion after the adjustment.

There was also another Sh246 million difference in operating expenses. This, the lender explained, was because in accordance to the CBK reporting standards, the deposit protection fund is treated as expense.

“Income from trading securities is treated as interest income under CBK reporting requirements, while deposit protection fund is also treated as interest expense under IFRS as this yield is enhancing,” the bank explained.

Most of the other details remain the same, including the balance sheet.