Stanbic has registered a 26.7% increase in Profit after tax to Ksh. 1.9 billion from Ksh. 1.5 billion recorded in a similar period last year. Loans and advances went down by 2.4% over the same period last year to Ksh. 157.9 billion, while government securities increased by 0.8%.
The financial results further revealed that the company’s total assets grew by 2.4% to Ksh. 317 billion, while customer deposits increased by 11.8% to Ksh. 226.6 billion the previous year. Total operating income increased by 11.1% to Ksh. 6 billion accompanied by 6.7% growth in Net Interest Income to Ksh. 3.2 billion and 21.7% increase in Non-Funded Income which is usually a major income earner for the bank to Ksh. 2.8 billion.
On the flipside, operating expenses increased by 6.3% to Ksh. 3.4 billion as a result of higher staff costs. Loan loss provisions also decreased marginally by 1.2% to Ksh. 0.61 billion from Ksh. 0.62 billion to cover for expected credit losses.
The company’s Assets Quality by non-performing loans (NPLs) increased to Ksh. 26.4 billion from Ksh. 21.1 billion, a direct result of heightened defaults associated with the economic effects of the COVID-19 pandemic. However, there was no interim dividend proposed as was the case in Q1 2020.
In 2020, the Group (Kenya Bank, South Sudan branch, SBG Securities and Stanbic Insurance Agency Limited) reported a profit after tax of Ksh. 5.2 billion. COVID-19 and its ripple effects to the economy including the waivers on mobile transactions granted by the bank to support clients and reduction in brokerage fees also negatively impacted non interest income. Increase in credit impairment charges reflects worsening credit risk on the back of layoffs and liquidity constraints on businesses caused by the pandemic.