Announcing an interim dividend of Sh6 per share, totaling Sh2.27 billion, Standard Chartered Bank Kenya reveals an 11.8% increase in net profit for the nine months ending September. The bank plans to distribute this payout on or around December 28. This distribution applies solely to ordinary shareholders recorded in the share register as of December 14, a crucial date marking their eligibility for receiving dividends.

Primarily propelled by a 34.6% surge in net interest income, reaching Sh21.2 billion, driven by increased lending, short-term investments in money markets, and improved margins; the company’s CEO, Kariuki Ngari, emphasized that this growth led to an escalation of their net profit from Sh8.71 billion to Sh9.74 billion. It’s worth noting this accomplishment indeed signifies significant progress for StanChart.

Nonetheless, non-interest income experienced a 6.6% decline, equivalent to Sh8.2 billion, despite the positive performance. Operating expenses also rose significantly by 28.4%, reaching Sh15.75 billion. This escalation in costs mitigated profit growth when compared with the previous year’s statistics. During that period, earnings had surged by 38% within nine months.

Substantial growth characterized foreign exchange trading income, escalating by 50% to Sh6.3 billion. Concurrently, fees and commissions also saw an increase of 18%, reaching Sh3.94 billion. Nonetheless, a loss in other income amounting to Sh2.3 billion, primarily due to bond holdings disposal, offset these gains. Mr. Ngari clarified that this strategic shift towards higher-yielding customer assets and short-term commercial investments precipitated such a move, offering context instead of justification for their actions.

Observing a 36% surge in non-interest income from client activities, the bank also encountered challenges, primarily losses incurred from disposing of bond holdings as mentioned previously. In terms of explaining the rise in operating costs, Mr. Ngari pointed to two factors: inflationary pressure and strategic investments aimed at bolstering the bank’s digital capabilities.

In response to the current challenging macro-economic environment, StanChart increased provisioning for loan defaults from Sh621 million to Sh1.82 billion, a significant surge of 2.9 times. Concurrently, staff costs also escalated by 20%, rising from Sh5 billion and culminating at an expenditure mark of Sh6.2 billion. This was one contributing factor towards the overall elevation in operating expenses.

Reflecting clients’ ongoing diversification of their investment portfolios, the bank announced that its wealth management business had experienced a 21% growth in assets under management, reaching an impressive Sh160 billion.

StanChart’s performance, along with that of Co-operative Bank of Kenya and Equity Group, both observed in a context marked by a slower-paced growth trend across the banking sector, reported increased net profit. However, this uptick was at a moderated pace compared to the previous year.