StanChart posts 33pc profit jump despite rise in bad debts
What you need to know:
- “While we do not see a broad-based deterioration in asset quality, we have increased the number of clients subject to additional, precautionary monitoring reflecting our proactive approach to managing risk in an uncertain environment,” StanChart chief executive officer Lamin Manjang noted.
- Total non-interest income rose by 30 per cent in the period to Sh5 billion, from Sh3.8 billion.
Standard Chartered Bank recorded 33 per cent increase in after-tax profit during the first half of 2014 despite a significant growth in bad debts.
Riding on growth in non-interest income arising from sale of property, the bank’s profit after tax rose to Sh6 billion between January and June 2014, compared with Sh4.5 billion in the same period last year.
Non-performing loans (NPLs) increased by a massive 284 percentage points to Sh14.6 billion, compared with Sh3.8 billion in the period under review, with the management citing problems it had recovering loans from some corporate and institutional clients.
PRECAUTIONARY MONITORING
“While we do not see a broad-based deterioration in asset quality, we have increased the number of clients subject to additional, precautionary monitoring reflecting our proactive approach to managing risk in an uncertain environment,” StanChart chief executive officer Lamin Manjang noted.
Total non-interest income rose by 30 per cent in the period to Sh5 billion, from Sh3.8 billion.
Interest income remained almost flat at Sh10.9 billion from Sh10.4 billion in the same period last year.
Income from foreign exchange dealings remained flat at Sh1.2 billion on account of low rates and low volatility environment resulting in margin compression, and offsetting the effects of volumes growth.
Fees and commissions increased to Sh2 billion, up from Sh1.9 billion in the comparative period.
Loans and advances increased by 11 per cent to Sh131.7 billion from Sh118.4 billion but customer deposits remained flat at Sh147 billion.
