StanChart earnings increase to Sh10bn

The disposal of an undisclosed asset and a surge in non-interest income pushed Standard Chartered Bank’s profit up by 12.6 per cent in 2014, despite a more than double increase in bad loans.
The lender’s earnings after tax stood at Sh10.4 billion in the year ending December 2014, up from Sh9.2 billion in 2013.

Gross non-performing loans registered a 179 per cent rise to Sh10.75 billion, compared to Sh3.8 billion in 2013, with chief executive Lamin Manjang acknowledging that last year was a difficult period due to the increase in bad loans and decline in lending. 

“We remain disciplined in our approach to risk management and proactive in our collection efforts to minimise account delinquencies,” Mr Manjang said. “We have taken decisive actions on the small number of non-performing loans and this position has improved significantly,” he said.

BAD LOANS

Growth in bad loans hampered expansion in interest income, which stood at Sh22.1 billion in 2014, two per cent higher than Sh21.7 billion reported a year earlier.

Loans and advances declined by six per cent to Sh122.7 billion, compared to Sh129.7 billion in 2013, with customer deposits also falling marginally to Sh154.1 billion from Sh154.7 billion in the same period.

“To a lesser extent, a lower tax charge (27.3 per cent compared to 30.6 per cent in 2013) also aided the numbers,” analysts at Standard Investment Bank said, adding; “Overall, performance was generally below expectation.”

The bank said it would tighten its grip on risk and cost management even as it eyes increasing financing to its customers to grow revenues. It said it would train its sights on retaining talent, which is increasingly becoming “much sought after by our competition”.

The lender declared a dividend of Sh17 per share an improvement on the Sh14.5 per share paid out in 2013.