FINANCIALS

Stanbic Bank's H1 profits drop by 35%

In Summary
  • The firm’s gross earnings dropped by over Sh1 billion to hit Sh4.04 billion compared to Sh5.4 billion in June last year.
  • CEO optimistic that reopening of the economy to have a positive effect on the bank's books in the coming quarter
CFC Stanbic bank. Photo/Monicah Mwangi
CFC Stanbic bank. Photo/Monicah Mwangi

Stanbic Holdings Plc weathered a challenging operating environment in the first six months of 2020 to register a profit of Sh2.5 billion, 35 per cent drop compared to the same period last year.

In a virtual release of the financial results, the lender said the performance reflects resilience amidst the Covid-19 pandemic, locusts invasion and pockets of floods in some parts of the country.

The firm’s gross earnings dropped by over Sh1 billion to hit Sh4.04 billion compared to Sh5.4 billion in June last year.

Even so, the lender maintained strong balance sheet growth as evidenced by a 27 per cent increase in customer deposits partly offset by a six per cent decline in net interest income arising from margin compression on the back of government monetary action to cut interest rates to stimulate lending in the private sector.

The listed lender saw a significant reduction in operating expenses to Sh5.2 billion representing a reduction of 15 per cent from the same period last year. This was due to proactive measures taken to re- prioritize expenditure to cushion against the impact of Covid-19.

Stanbic Kenya CEO Charles Mudiwa said the lender continues to support its clients by offering fee waivers on digital channel transactions in compliance with the Central Bank of Kenya directive. This partly impacted the fees and commission revenue reported in the first half of 2020.

He is optimistic that the reopening of the economy after strict Covid-19 containment measures will have a positive effect on the bank’s book in the coming days.

‘’We are starting to see positive growth in the economy following the ease of the lockdown, hence the next six months will be crucial to ensure we defend earnings and register growth. We are refocusing our efforts on digital innovation to further exploit new opportunities, ‘’ Mudiwa said.