•Total income fell 6.5 per cent to Sh23.2 billion from Sh24.8 billion the previous year.
•The lender restructured loans worth Sh40 billion to support customers during the Covid-19 pandemic period, of which Sh3.1 billion was related to SMEs.
Image: COURTESY
Stanbic Holdings Plc has reported an 18.7 per cent drop in profit after tax for the year ending December 2020, amid falling operating income in the wake of the Covid-19 pandemic.
Net earnings for the period under review closed at Sh5.2 billion, down from Sh6.4 billion as total income fell 6.5 per cent to Sh23.2 billion from Sh24.8 billion the previous year.
Impairment charges further pushed the lender's income to Sh18.4 billion from Sh21.6 billion, with the bank on Friday noting “a challenging operating environment in 2020".
The performance was on the back of Covid-19 induced restrictions, subdued interest rates, weakening of the local currency and increased regulations.
In support for clients, Stanbic undertook various interventions to cushion against the adverse effects of the pandemic.
Despite a challenging operating environment, I am proud that Stanbic stood shoulder to shoulder with our clients and the Kenyan community when it really mattered the mostStanbic Bank Kenya CEO Charles Mudiwa
It was the first bank in Kenya to issue loan moratoriums for individuals, SMEs and corporates, benefiting over 7,200 clients.
The lender restructured loans worth Sh40 billion of where Sh3.1 billion was related to SMEs.
Through its insurance franchise, over 400 retrenchment claims were fully paid to assist clients weather the challenges presented by Covid-19.
The group waived charges on digital channels to the tune of Sh283 million in foregone fee revenue and lowered interest rate in line with regulations, saving clients Sh665 million in interest.
This reduced the interest income for the lender.
The Group increased its provisioning to reflect the worsening credit risk on the back of layoffs and liquidity constraints on businesses caused by the pandemic.
However, the group maintained a strong balance sheet growth as evidenced by a 12 per cent increase in customer deposits and four per cent growth in customer loans and advances.
Deposits from banks and customers closed at Sh259.9 billion up from Sh224.6 billion, while loans and advances to banks and customers increased to Sh196.3 billion up from Sh191.1 billion previous year.
Commenting on the performance, Stanbic Bank Kenya CEO Charles Mudiwa said: “Despite a challenging operating environment, I am proud that Stanbic stood shoulder to shoulder with our clients and the Kenyan community when it really mattered the most."
The lender supported clients through its DADA proposition where it on-boarded over 10,000 women while issuing loans worth Sh844 million to support them and their businesses, Mudiwa noted.
Together with its partners, the lender also spent over Sh147 million in various Covid-19 relief interventions which included a donation of 192 ventilators to the Ministry of Health.
The Group will continue to strengthen partnerships via the Stanbic Kenya Foundation, which has over the year, trained 500 entrepreneurs, completed financial fitness academies for nine corporates training 681 individuals, Mudiwa said.
The Group also recently announced a partnership with Microsoft dubbed the Digital Global Skills initiative, geared towards imparting technical skills to the youth to enable them to participate in the global gig economy.
The directors of Stanbic Holdings Plc (the Company) have recommended a final dividend of Sh3.80 for each ordinary share of Sh5 on the issued and paid up share capital of the company.
Subject to shareholders’ approval, the final dividend will be payable to the members of the company registered on the share register of the company on the closure date of May 21, 2021.