News Column

Stanchart Beats Peers in Q1 Profit Growth Pace

June 2, 2014

Constant Munda

STANDARD Chartered Bank has posted the highest growth in profit after taxation among the top tier lenders for the three-month period ended March 31. The bank's profit surged 34.2 per cent to Sh2.5 billion from Sh1.87 billion a year earlier.

The growth in net earnings was higher than Kenya Commercial Bank's 28.6 per cent profit jump. However in terms of actual earnings KCB topped the top tier bank list with a profit of Sh3.90 billion. Equity profits grew 20.68 per cent to Sh3.88 billion and Barclays' rose 16.9 per cent to Sh1.94 billion .

Co-operative Bank's profit over the same period however slid 5.6 per cent to Sh2.5 billion. Stanchart's profits were largely driven by an increase in interest earnings and a slight drop in operating costs.

Interest income went up to Sh4.46 billion, a 19.2 per cent growth over Sh3.74 billion previously, according to its financial statement for the first quarter of the year published Thursday evening. Earnings from transaction fees and commissions climbed by a slim 3.8 per cent to Sh1.72 billion.

The lender reported that its loans rose by Sh10.28 billion over a corresponding period in 2013 to stand at a portfolio of Sh127.59 billion. Its customers deposited a total of Sh7.33 billion more to close the quarter at Sh149.64 billion, up from Sh142.31 in a similar period last year.

The bank owned 73.89 per cent by London-based Standard Chartered Plc was nonetheless the only to post a drop in operating costs at marginal rate of 2.8 per cent to Sh2.59 billion up from Sh2.67 billion.

Stancart said in March 25 it was targeting deals in upstream oil and gas, power generation and major transport infrastructural projects going forward leveraging on its global experience. The investment banking services will be managed from its Johannesburg office after it closed down the corporate advisory unit in Nairobi last October.

Investment banking has become increasingly attractive to commercial lenders seeking to grow their revenue streams. Largest bank by market value KCB was last February licensed to run an investment banking subsidiary, KCB Capital.

Ecobank Kenya also said in February it expected its last December application to be cleared by the CMA by next month. Other banks with established investment banking arms include Barclays, CfC Stanbic (SBG Securities), Equity, Co-op (Kingdom Securities), Commercial Bank of Africa, NIC and Chase(Genghis Capital).

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Source: AllAfrica

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