StanChart’s Profits Spike 33% To Hit Ksh 12.1 Billion

Standard Chartered Bank released its FY22 results recording a 33.3 percent y-o-y growth in after-tax profits to 12.1 billion shillings.

This was mainly due to an 18.1 percent y-o-y increase in net interest income to 22.2 billion shillings, a 13.5 percent y-o-y rise in non-funded income to 11.8 billion shillings, and a 36.2 percent y-o-y decline in loan loss provisions to 1.3 billion shillings.

EPS for the period stood at KES 31.47 (FY21: KES 23.49). The board recommended a final dividend of 16.00 shillings per share placing the total dividend per share for the period at 22.00 shillings (FY21: 19.00), having already paid an interim dividend of 6.00 shillings per share.

If approved, the final dividend will be paid on 25th May 2023 to shareholders on the register at the close of business on 21st April 2023.

Net interest income went up by 18.1 percent y-o-y to 22.2 billion shillings driven by a 14.3 percent y-o-y increase in interest income to 25.5 billion shillings and a 6.5 percent y-o-y drop in interest expense to 3.3 billion shillings.

The yield on interest-earning assets grew by 274 bps y-o-y to 10.4 percent while the cost of funds dropped marginally by 11 bps y-o-y to 1.1 percent. This placed the net interest margin at 9.2 percent, a 285 bps y-oy improvement.

Non-funded income rose by 13.5 percent y-o-y to KES 11.8 BN owing to a 58.4 percent y-o-y increase in net income from forex dealings to KES 6.0 BN and a 13.8 percent y-o-y rise in other operating income to 1.3 billion shillings.

Fees and commissions on loans fell by 38.7 percent y-o-y to 221.9 million shillings while other fees and commissions decreased by 16.2 percent y-o-y to 4.3 billion shillings. The contribution of non-funded income to total income eased by 91 bps y-o-y to 34.6 percent.

Operating expenses (less loan loss provisions) increased by 7.3 percent y-o-y to 15.5 billion shillings primarily steered by an 8.2 percent y-o-y rise in staff costs to 6.8 billion shillings and a 12.8 percent y-o-y increase in other operating expenses to 7.0 billion shillings.

Loan loss provision expense eased by 36.2 percent y-o-y to KES 1.3 BN, placing the cost of risk at 1.0 percent, 70 bps lower y-o-y. Gross non-performing loans edged down by 3.0 percent y-o-y to 22.6 billion shillings (-6.0 percent q-o-q) placing the NPL ratio at 13.9 percent, 112 bps lower y-o-y.

Customer loans and advances inched higher by 10.7 percent y-o-y to 139.4 billion shillings (+2.5 percent q-o-q) while investment securities rose by 10.5 percent y-o-y to 106.1 billion shillings (-5.6 percent q-o-q). On the funding side, customer deposits advanced by 5.1 percent y-o-y to 278.9 billion (-2.5 percent q-o-q).

StanChart is currently trading at a P/E ratio of 5.2x against an industry median of 3.7x, and a P/B of 1.1x against an industry median of 0.7x. Its ROE stands at 21.5 percent while its ROA stands at 3.2 percent.

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