Stanchart posts 7 per cent growth in pre-tax profits
By James Anyanzwa
Standard Chartered Bank has announced a seven per cent growth in pre-tax profit for the full-year ended December 31, 2011.
The bank’s profit before tax climbed to Sh8.3 billion from Sh7.7 billion in 2010.
The bank attributed the improved performance to increased revenues from its custodial services business, forex trading, and fees and commissions.
The bank also profited from improved earnings accruing from the re-pricing of its credit instruments due to the higher interest rate regime prevailing during the period.
Chief Executive Richard Etemesi said the bank is focused on investing at pace to shore up its resilience and perk up earnings.
"We are obsessed with the basics of banking: being well capitalised, highly liquid; managing risk proactively; keeping tight control of costs; and being diversified," he said.
According to the bank’s audited financial statements released Tuesday, total income rose 15 per cent Sh16.2 billion from Sh14.2 billion in the previous year.
This was a result of strong growth in interest income, which increased by 21 per cent from Sh.8.4 billion to Sh.10.1 billion.
Interest income on loans and advances increased by 59 per cent to Sh9.5 billion on the back of strong asset growth across both businesses and re-pricing of facilities due to higher interest rates.
Non-interest income increased by 6 per cent to Sh6.1 billion due to good growth in revenue from foreign exchange, fees and commissions. However, this was tempered by the realised and unrealised mark-to-market losses in the bond portfolio as well as the foreign exchange derivatives.
Fees and commissions increased by 29 per cent from Sh2.6 billion to Sh3.4 billion driven mainly by significant growth in loans and advances, trade finance and improved revenues from our custodial services business.
Income from foreign exchange trading increased to Sh2.6 billion — fueled by the shilling volatility and on account of increased volumes traded by importers in the manufacturing, agriculture, and oil and telecommunications industries.
Growth in foreign exchange income was also driven by the combination of regular economic expansion coupled with an aggressive growth strategy.
Total operating costs grew 23 per cent to Sh7.4 billion from Sh6 billion due to the bank’s investment in new business capabilities, construction of new head office building in Chiromo, acquisition of custody business and recruitment of additional staff in Priority Banking and SME businesses.
Shilling edges closer to 13-month high on high ratesThe shilling held at a near 13-month high Tuesday as local lending rates rose, giving foreign investors a bigger return for holding the currency, and traders said it could break past 82 per dollar this week.
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