Standard Chartered Bank Kenya Limited today announced a pre-tax profit of KShs 12.2 billion for the year ended 31 December 2019.
The advances-to-deposits ratio increased to 56 percent from 53 percent at 31 December 2018 while the liquidity ratio at year-end was 63 percent, well above the minimum regulatory requirement. Customer deposits increased 2 percent with an increase in retail current accounts off-set by a run-off in corporate current and savings accounts.
Loans and advances to customers increased 8 percent to KShs 129 billion since 31 December 2018 driven by growth across all segments. Gross non-performing loans reduced 7 percent year-on-year. Overall credit quality has remained stable and we continue to focus on the quality of the balance sheet.
Credit impairment on loans reduced by KShs 1.4 billion to KShs 573 million and is at its lowest level in five years. Our actions over the past few years to support our clients to improve the risk profile of the balance sheet and continued focus on high-quality origination continue to pay off.
Net interest income remained broadly flat reflecting on the lender’s continued focus on the quality of its balance sheet. On the other hand, Non-interest income similarly remained flat with increased contribution from the foreign exchange but tempered by a slowdown in corporate finance.
The lender reported an increase in operating expenses of up to 8 percent driven by investment in technology. The resolution of investigations into historical financial crime control matters included monetary penalties of KShs 178 million, of which KShs 100 million was provided in the current year.
The bank’s cover ratio for non-performing loans stands at 70 percent, a 300 bps increase from 31 December 2018 and remains well above the industry average of 35 percent.
According to Kariuki Ngari, CEO StanChart Kenya, the Bank remains well-capitalized with all metrics above regulatory thresholds. The total capital ratio of 17.73 percent is 174 basis points lower than as at 31 December 2018 as profits generated in the year were partially offset by credit and market RWA growth and higher dividends.
“We have achieved important milestones on our strategic priorities in 2019. Our investments to transform the Bank digitally, develop and scale new business models, and build skills of strategic value to our clients continue apace. Key client digital adoption measures continue to improve – we have over 70 digital services and products on our mobile app, over 85% of transactions conducted through non-branch channels in Retail Banking, and close to 90% of our corporate clients are utilizing our Straight2Bank platform. The Bank was recently awarded ‘Best Bank for Digital Experience’ in the KBA customer satisfaction for the second year running, ‘Best Consumer Digital Bank’ and ‘Best Bank for Cash Management’ in Kenya, 2019 by Global Finance”, said Kariuki Ngari, Chief Executive Officer.
“Executing our refreshed strategic priorities remains our focus and we will continue to invest in areas of our competitive advantage in 2020. We remain cognizant of our responsibility in the fight against financial crime and as we continue to transform Standard Chartered this year, we will welcome challenges, adapt swiftly and be uncompromising in our pursuit of high performance,” he added.