CFC Stanbic beats odds to post Sh5 billion profit

CFC Stanbic Holdings defied decreased credit appetite by its corporate clients to record a 70 per cent profit jump on account of growth in interest income and good performance of its securities business.

The company’s profit after tax rose to Sh5.1 billion in the year ending December 2013, up from Sh3 billion recorded over a similar period in 2012. 

The lender said a 10 per cent decline in loans and advances to corporate clients was cancelled out by a significant growth in personal and business advances.

Net interest income grew by Sh1 billion to Sh7.5 billion. A Sh1.1 billion increase in fees and commission income was the major driver of the significant profit growth.

“This was mainly attributable to revenues earned from higher transactional banking revenues in South Sudan and growth of the trade finance operations,” said the lender in a statement.

A cut in the base lending rate by Central Bank last year resulted in significant growth in the lender’s loan book from Sh25.4 billion in 2012 to Sh103.8 billion last year.

Total operating expenses dropped by 7.3 per cent to Sh8.2 billion attributed partly to cost-cutting measures targeted at the firm’s wage bill.

Customer relations

The chief executive Greg Brackenridge expressed confidence in the group’s profit outlook for this year, adding that the main focus is to continue working on improving customer experiences.

The group’s securities business performed strongly with its profit after tax increasing by more than 100 per cent mainly due to an rise in Nairobi Securities Exchange turnover.

The lender proposed a Sh2.15 dividend per share, representing a 195 per cent increase from the Sh0.73 paid out in 2012.