- Gross profit grew by 70%
- The bank is worried about geopolitical tension between Ukraine and Russia
Standard Chartered Bank Kenya’s net earnings for the year ended December 31, 2021, grew 67 percent as the economy recovered from the Covid-19 pandemic.
According to the financial results released Monday, the lender reported a profit after tax of Sh9 billion compared to Sh5.4 billion in the previous financial year.
“Income returned to growth after the dip last year occasioned by the impact of the pandemic, increasing seven per cent with strong underlying business momentum,” Standard Chartered Bank, Kenya CEO Kariuki Ngari said.
Gross earnings rose by 70 per cent, the highest rate in five years driven by lower costs and resilient income.
“We continue to transform how we serve our customers through innovations, partnerships and digitisation whilst maintaining a tight control on expenses with underlying efficiencies funding continual investment,” Kariuki said.
He added that loan loss provision was reduced as the bank worked closely with clients to support them walk through the pandemic.
The lender remained well capitalised during the period under review, with a highly liquid balance sheet, with a total capital ratio of 17.76 per cent and a liquidity ratio of 71 per cent respectively.
Credit impairment declined 46 per cent to Sh2.1 billion, with the overall portfolio remaining stable and resilient.
The bank’s loan book grew four per cent to Sh126 billion compared to Sh121.5 billion in 2020. Customers’ deposits also rose by a similar percentage to close the year at Sh265.5 billion compared to Sh256.5 billion.
While releasing the full-year earnings, Chemutai Murgor, the bank’s Chief Finance Officer (CFO) said the firm’s net interest income decreased two per cent to Sh18.8 billion compared to Sh19.1 billion in 2020.
Over the same period, the bank’s non-interest income increased by 25 percent with strong performances in wealth management and financial markets.
Increased investment in transformational digital initiatives led to a 10 per cent drop in the firm’s operating expenses.
“Looking at our balance sheet, we are happy that it remains strong and highly liquid. The overall asset quality remained stable,” Murgor said.
The bank is expected to continue focusing on its differentiated corporate network and cash rich personal businesses through increased digital capabilities with a focus on the mass retail segment.
Ngari said that they are concerned about geopolitical tension between Ukraine and Russia but remain hopeful as Covid-19 cases continue to decline.
“We are remaining cautious of potential threats of new variants, inflation, the impact of the war, and upcoming General elections, these are the real risk we see could affect our outlook for 2022,” he said.
The board has recommended the payment of a final dividend of SH14 for every ordinary share of Sh5. An interim dividend of Sh5 was declared and paid in December 2021.
This will bring the total dividend for the year to Sh19 per ordinary share, which is 81 per cent higher than that the 2020 pay out.