Follow

Standard Chartered full-year profit dips 34pc to Sh5.4 billion

By , People Daily Digital
Friday, March 26th, 2021 00:00 | 2 mins read
Standard Chartered Bank. Photo/Courtesy

Standard Chartered Bank has announced a 34 per cent drop in its profitability for the financial year ended December 2020 by posting Sh5.4 billion against Sh8.2 billion recorded during the same period in 2019.

Chief Executive Officer Kariuki Gari said though the bank remained strong and profitable, earnings were impacted by higher provisions and reduced economic activity as a result of the Covid-19 pandemic.

During the period under review, profit before tax also reduced by 39 per cent to Sh7.4 billion from Sh12.2 billion.

“Overall, income declined as did our profit for the year, notwithstanding tight control of expenses,” said Ngari.

In the period under review, net interest reduced by two per cent to Sh19.1 billion, compared to Sh19.5 billion posted in the same period in 2019, in what chief financial officer Chemutai Murgor said was a reflection of low interest rates and transactional volumes from effects of the pandemic.

The lender’s operating income declined by 4.5 per cent to Sh27.4 billion from Sh28.7 billion on the back of subdued economic activity in 2020.

Ngari said loan impairment increased by Sh3.3 billion to Sh3.8 billion, driven by a Sh1.5 billion increase in impairments across all client segments as a direct result of the pandemic.

This, he said, includes a net increase in the judgmental management overlay of Sh970 million the Bank proactively reserved for forward-looking risks.

Substantial provisions

“Having made substantial provisions against expected credit losses during the year, conditions have stabilised somewhat in 2021,” he said, adding that despite the encouraging signs, the credit risks facing the bank are likely to remain elevated during what is likely to be a difficult economic recovery ahead.

Ngari said  the balance sheet remains strong and highly liquid, with customers deposit increasing by 12.3 per cent to Sh256.5 billion from Sh228.4 recorded in 2019, while net loans and advances to customers decreased 5.6 per cent to Sh121.5 billion from Sh128.7 billion.

Recommended Stories