StanChart Kenya warns profit fall due to Sh7b pension payment

Standard Chartered Kenya Board of Directors Chairperson Kellen Kariuki and Managing Director and CEO Kenya & Africa Kariuki Ngari during the launch of the bank's Sustainability Progress Report in Nairobi.[Wilberforce Okwiri,Standard] Tier one lender, Standard Chartered Bank Kenya Ltd, has projected at least a 25 per cent fall on its 2025 full-year net profit, attributing the decline to a significant financial provision linked to a pension dispute that is estimated to require a Sh7 billion payout. The Nairobi-based subsidiary of UK's multinational Standard Chartered Plc, specified in a regulatory filing that the net income for the year ending December 31, will decline due to costs associated with the Retirement Benefits Appeals Tribunal judgment. In the profit warning announcement filed with the Capital Markets Authority, the lender stated that the anticipated decline is a direct result of the judgment in "Abdalla Osman and 628 Others versus the Retirement Benefits Authority & 11 Others" and subsequent computational directions issued by the Retirement Benefits Appeals Tribunal in May this year. The bank confirmed that the payments, which it has begun processing, will impact its overall costs in line with the IAS 19 accounting standard for employee benefits. The profit warning is based on its unaudited financial results for the period that ended in August 31, 2025, and internal forecasts to the year-end. "The payments will impact SCBKL's overall costs in line with 'IAS 19 Employee Benefits' on accounting for past service costs," the lender's board said, while reassuring stakeholders that the bank "is adequately capitalised to meet the anticipated obligations." The projected profit drop represents a stark reversal from the bank's record performance just a year earlier. For the year that ended in December 2024, StanChart Kenya had reported a net profit of Sh20 billion, a 45 per cent increase that allowed it to declare a record of Sh17 billion dividend payout. Based on company forecasts, a 25 per cent decline from the 2024 profit of Sh20 billion would see StanChart's 2025 net earnings fall to approximately Sh15 billion. UK banking multinational Standard Chartered Plc, which owns 75 per cent of the Kenyan unit according to information on its website, last year had smiled all the way to the bank by taking home about Sh12.75 billion in dividends from the dividend payout. The Kenyan unit confirmed it has begun collecting information from the 629 appellants to verify and process their claims. "We will commence the process of collecting the requisite information for the purpose of verification and subsequently processing claims," the Standard Chartered Kenya Pension Fund said in a notice last week. Despite the anticipated earnings hit, the bank's statement reiterated its commitment to its strategy of "combining differentiated cross-border capabilities with leading wealth management expertise underpinned by sustainability." The announcement, signed by Board Chairperson Kellen Kariuki, was made pursuant to Kenyan capital markets regulations requiring listed firms to issue profit warnings if they anticipate a significant deviation from past financial performance.

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StanChart Kenya warns profit fall due to Sh7b pension payment

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