Stanbic Holdings made Kshs 7.2 billion in net profit during the first six months of this year, up 2.3% after higher interest expenses on customer deposits nearly offset increased interest income.
Interest expenses on customer deposits tripled to Kshs 10.9 billion during the first six months of this year, up from Kshs 3.6 billion during a similar period in 2023.
Total interest income rose from Kshs 16.4 billion to Kshs 24.5 billion, representing an increase of 49.1%. This was mainly on account of higher interest income on loans and advances, which rose 44.3% to Kshs 18.3 billion. This is in addition to Kshs 3.5 billion in interest income from lending other banking institutions and Kshs 2.7 billion the lender booked as interest income on government securities.
Non-interest income dipped 13.5% to Kshs 7.5 billion on account of lower forex trading income. This is after the lender booked Kshs 4.7 billion in forex trading income, down from Kshs 6 billion it made during the first six months of 2023.
Other than the tripled Interest expenses on customer deposits, Stanbic Holdings’ staff costs rose 11.5% to Kshs 4.3 billion while loan loss provision was trimmed from Kshs 2.1 billion to Kshs 1.9 billion.
This was after the total non-performing loans and advances reduced from Kshs 18.97 billion to Kshs 18.6 billion.
Less loan loss provision, the lender says the net non-performing loans decreased from Kshs 10.1 billion to Kshs 6.1 billion.
The lender’s financials indicate that it has been reducing loans and advances to customers over the last three quarters, decreasing from a higher of Kshs 260.5 billion in December 2023, to Kshs 255.8 billion in March 2024 then to Kshs 238.2 billion as at end of June 2024.
The lender has proposed a dividend payout of Kshs 1.84 per share.
Commenting on the results, Stanbic Bank Kenya and South Sudan Chief Executive, Joshua Oigara, said: “The appreciation of the Kenya Shilling against the Dollar bolstered foreign exchange reserves and provided some economic stability. However, severe floods in between the months of March to May, caused extensive damage to infrastructure, agriculture, and homes, disrupting economic activities and necessitating substantial recovery efforts. Additionally, the latter part of the half was characterised by civil protests.”
The Bank’s Chief Financial and Value Officer, Dennis Musau, says: “The strong growth in customer deposits is a testament to the trust our clients have in us and validates our significant investments in enhancing the customer experience.”