Standard Chartered Bank Kenya announces results for the full year 2014

Standard Chartered Bank Kenya Limited announced its results for the full year ended 31st December 2014 with the following highlights:

• Interest income went up by 2.0 percent from KES 21.68bn to KES 22.12bn driven by increased balances due to banking institutions and investments in government securities.

• Interest expenses went down 14.3 percent from KES 4.92bn to KES 4.22bn as a result of a decrease in deposits and lower yields.

• This brought about a net interest income growth of 6.8 percent to KES 17.90mn from KES 16.76mn.

• Non-interest income went up by 15.6 percent from KES 7.07bn to KES 8.17bn largely driven by a 140.8 percent increase in other income.

• Total operating income went up by 9.4 percent to KES 26.07bn with total operating expenses going up by 12.0 percent to KES 11.73bn. The increase in total expenses was attributable to the 32.5 percent increase in loan loss provisions to KES 1.31bn. The cost income ratio stood at 45.0 percent.

• Loans and advances to customers fell by 5.3 percent to KES 122.75bn whereas total deposits due declined by 2.97 percent to KES 171.08bn. This decline in total deposits was majorly affected by the 21.2 percent decline in deposits due to banking institutions to KES 17.01bn. Customer deposits fell by 0.4 percent to KES 154.07bn.

• The NPL ratio went up from 1.2 percent to 3.9 percent. The Net Interest Margin went up from 8.64 percent to 9.22 percent.

• Total shareholder’s funds went up by 12.3 percent from KES 36.21bn to KES 40.66bn.

• Profit before tax went up by 7.4 percent to KES 14.35bn while profit after tax went up by 12.7 percent from KES 9.26bn to KES 10.44bn.

• The Directors have proposed a total dividend payout of KES 17.00 per share.

Our view

• Cost efficiency will continue to be a key strength for the bank as it employs prudent cost management strategies helping it to maintain one of the lowest cost to income ratios in the industry.

• Competition from local banking institutions remain a risk in growth of customer numbers as they come up with more ways to support customer needs such as agency banking and innovative use of the M-Pesa platform