StanChart bank to pay dividend despite 21% drop in 2025 half-year net profit

Standard Chartered Bank Kenya shareholders will continue enjoying dividends despite a drop in earnings for the half-year 2025, occasioned by what the lender described as a "challenging operating environment".

The Nairobi Security Exchange-listed lender has reported a Sh8.1 billion profit after tax for the period ended June 30, 2025, a 21.4 per cent drop compared to Sh10.3 billion same period last year.

­Operating income decreased by 15 per cent to Sh22.1 billion from Sh26.1 billion on account of net interest income, which decreased by seven per cent to Sh15.3 billion.

This has been pegged on volume decline and margin compression on the back of declining interest rates.

Non-interest income decreased by 29 per cent to Sh6.8 billion from a decline in transactional volumes and margins in transaction services, markets and wealth solutions.

­Despite the performance, the lender’s directors have announced the payment of an interim dividend of Sh8 for every ordinary share of Sh5.00 to be paid to shareholders on the register as at the close of business on September 11, 2025 and will be paid on or about  October 7, 2025.

“This leaves our total Capital Ratio at 19.7 per cent and 520 basis points above the regulatory minimum, providing a strong base to continue supporting our clients’ borrowing needs as interest rates continue to ease,” managing director and CEO Kariuki Ngari said.

“Our performance in the first half of 2025 was solid delivering profit before tax of Sh10.9 billion albeit a 25 per cent drop year on year.”

During the period under review, the lenders operating expenses remained flat with prudent cost management, investments to fund business growth and digital capabilities continuing to deliver efficiencies.­

Impairment losses on loans and advances reduced 25 per cent from recoveries, prudent oversight of the loan book and a continued focus on asset quality, management noted, with the balance sheet remaining strong, liquid and well capitalised.

­Net loans and advances to customers remained flat compared to December 2024. During the six months, loans and advances totalled Sh152.2 billion up from Sh151.6 billion same period last year.

Customer deposits were down two per cent to Sh290.6 billion as a result of reduction in customer balances. Funding quality remained high with current and savings accounts making up to 97 per cent of total customer deposits.

The liquidity ratio was at 64.5 per cent, well above the regulatory threshold of 20 per cent with a total capital ratio of 19.7 per cent above the regulatory minimum.

“The Kenyan economic environment remains stable with low inflation, stable currency and lower interest rates. However, we are conscious of the headwinds associated with growing complexities and uncertainties in the global macroeconomic environment,” said Ngari.

“We remain resolute in the belief of the strength of our strategy and resilience of our people in supporting our clients navigate these challenging times,”.