GROWTH

Stanchart's H1 profit up 28% despite bad loans rise

The growth was delivered by a 34 per cent performance increase of both businesses.

In Summary
  • Operating income in the period under review increased 34 per cent.
  • Loan impairment went up by Sh1.79 billion to Sh2.04 billion from Sh108 million last year.
The Standard chartered bank on Kenyatta avenue
The Standard chartered bank on Kenyatta avenue
Image: FILE

Standard Chartered Bank profit after tax for the six months to June this year grew by 28 per cent to Sh6.9 billion, defying the tough macro-economic environment.

This is a growth from Sh5.4 reported the same period last year on account of  a 34 per cent increase of both retail and institutional businesses.

According to the bank's CEO Kariuki Ngari, the external environment remains challenging, but is expected to ease in the second half .

"We have delivered a strong financial performance in the first half of the year, and we have achieved these results by focusing on our clients, supporting our colleagues and staying true to our brand promise," Ngari said.

He added that while staying conscious of the external macroeconomic headwinds, both global and local, the lender remains optimistic of further growth in the second half.

"With inflation starting to cool off and the measures being taken by both the monetary and fiscal authorities to stabilise our economy, we are hopeful of a better external environment in the second half of the year." 

Operating income in the period under review increased 34 per cent driven by strong performance across wealth management, financial markets and retail products.

Net interest income increased 38 per cent due to volume growth and improved margins while non-interest income registered 27 per cent growth from increased transactional volumes and margins.

Customer deposits grew two per cent from December last year to Sh283.6 billion as net loans and advances to customers increased four per cent to Sh145.4 billion within the same period.

The operating expenses were up 17 per cent from increased staff costs and continued investment which the lender says was spend on transformational digital initiatives.

Loan impairment went up by Sh1.79 billion to Sh2.04 billion from Sh108 million last year.

"This prompted loan impairment charge increase year-on-year, reflecting a volatile and challenging macro-economic environment," the lender says in a statement.

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