Standard Chartered Kenya announced a pre-tax profit of KES 8.1 billion for the first half of 2014, a nearly 24 per cent rise from KES 6.5 billion in the same period last year. Total income is up 16 per cent to KES 13.8 billion with loans and advances up by 11 per cent to KES 131.7 billion.
The Bank reported that net interest income grew by nine per cent to KES 8.8 billion, driven by strong growth in volumes but weighed down by the significantly lower interest rates charged in line with falling interest rates in the market.
Non-interest income increased by 31 per cent to KES 5 billion largely from the sale of a property. On a headline basis, non-interest income decreased by nine per cent. Income from foreign exchange dealing remained flat at KES 1.2 billion on account of a low rates and low volatility environment resulting in margin compression, and off-setting effects of volumes growth. Fees and commissions increased to KES 2 billion up from KES 1.9 billion in the comparative period.
However at the same time, net bad debt charge increased to KES 857 million from KES 556 million driven by a small number of accounts. Non-performing loans rose to KES 14.6 billino compared to just KES 3.8 billion in the same period of 2013. The Bank attributed the jump to 'a small number of problem accounts' among corporate and institutional clients.
"We continue to have a proactive approach to risk management and remain watchful," The Bank said in a statement. "We have been extremely disciplined in managing costs, up two per cent to KES 4.8 billion, despite continued investment and inflationary pressures. It also reported that investment in government securities decreased from KES 65.9 billion to KES 55.5 billion.
"We remain confident in the outlook for the business as we expect business momentum to pick pace. On the retail front we shall continue to invest in digital channels to deepen our client reach and to ensure our customers enjoy a differentiated experience,"
"Our business is well positioned to continue being the right partner to our clients. This is in line with our strategic intent – we will continue banking the people and companies driving investment, trade and the creation of wealth across our footprint."
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