Standard Chartered profit climbs to Sh5b

By James Anyanzwa

Standard Chartered Bank’s cautious approach to expansion continues to pay off.

The bank yesterday posted a 41 per cent growth in its pre-tax profit for the nine months ending September 30 compared to the same period last year.

The third quarter profit jumped to Sh5.2 billion, from Sh 3.7 billion. According to the bank’s unaudited financial statements, revenues grew 23 per cent to Sh9.2 billion from Sh7.5 billion.

Mr Richard Etemesi, the bank’s Chief Executive Officer attributed the improved revenue earnings to an elaborate strategy of building long-term, sustainable business.

Unlike its fellow big banks, Standard Chartered avoided a rush to open new branches, concentrating instead on strengthening its network with new technology and offerings.

Capital management

"We have a clear strategy that is working well," said Etemesi, adding that the bank will continue to focus on the basics of banking, liquidity and capital management, credit risk management, cost control, efficiency and customer service. Etemesi said investment in new technology had enabled the bank to manage costs, improve efficiency, serve new customer segments and widen customer reach.

"We continue to benefit from the growth opportunities across our target market segments", he said.

During the period under review, operating costs advanced 5 per cent to Sh3.7 billion from Sh3.5 billion, while net bad debt charge increased three per cent to Sh299 million from Sh291 million.

Non-performing loans as a proportion of total loans, declined to 3.5 per cent from 4.4 per cent last year, the lowest in the banking sector.

Loans and advances grew 18 per cent to Sh48.4 billion from Sh41.1 billion while customer deposits grew by 18 per cent to Sh89.4 billion from Sh75.9 billion in a similar period. Earnings per share increased by 46 per cent to Sh13.21 per ordinary share from Sh9.03. The bank’s board of directors recommended a second interim dividend of Sh2.50 per share.

Concern remains, however, over the current drought, and high food and fuel prices.

But Etemesi is optimistic that the bank is well positioned to weather the economic uncertainties, and deliver a strong and financial performance this year.

 

 

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