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Standard Chartered Bank (SCB) Kenya has reported a 14.7 per cent rise in its net profit for the fiscal year 2023, climbing from Sh12.1 billion in the previous year to Sh13.8 billion.

The lender’s Chief Financial Officer Chemutai Murgor attributed the positive financial performance to increases in net interest and non-interest income.

During the review period, net interest income increased by 31.9 per cent from Sh22.2 billion in 2022 to Sh29.3 billion, indicating the bank’s ability to generate high-quality earnings from its core business.

The lender’s non-interest income, which includes fees and commissions, foreign exchange trading income, and other income also rose by 5.52 per cent to Sh12.4 billion from Sh11.8 billion in 2022.

The increase in operating income was due to robust growth in net interest income and a modest rise in non-interest income, fueled by asset volume expansion, improved margins, and increased transaction volumes.

However, the bank faced a hike in operating expenses due to inflation and digital investments, and an increase in impairment losses on loans and advances.

Despite these challenges, the bank maintained its credit quality and saw a rise in loans and advances due to increased client demand. The bank also experienced a surge in customer deposits, indicating superior funding quality and high liquidity.

Chief Executive Kariuki Ngari, said SCB Kenya had a strong performance which saw an increase in profit before tax, growth in revenue attributed to strong business momentum and improved margins. He said the bank also continued to invest in a robust digital proposition, which, along with the impact of inflation, led to a rise in operating expenses while growth in loans and advances as well as deposits saw growth, indicating the company’s ongoing value provision to its clients.

Ngari noted that the bank delivered a strong performance in 2023 with profit before tax up 15 per cent year on year to 19.7 billion, adding that the top line growth of 23 per cent benefited from strong business momentum coupled with improved margins.

“Our continued investment in a strong digital proposition and the impact of inflation led to a 20 per cent rise in operating expenses. Loans and advances were up 17 per cent, while deposits grew by 23 per cent, demonstrating that we continue to provide value to our clients,” Ngari said.

The bank reported a significant increase in total interest income, which rose by 27 per cent from Sh25.5 billion in 2022 to Sh32.4 billion in 2023, primarily driven by an increase in interest income of Sh32.4 billion from loans and advances, deposits and placements with banking institutions.

Despite the growth in interest income, the bank managed to slightly decrease its total interest expenses by 6.86 per cent from Sh3.2 billion in 2022 to Sh3 billion in 2023, demonstrating the bank’s effective cost management strategies. The total operating expenses grew by 30.8 per cent from Sh16.9 billion in 2022 to Sh22.1 billion in 2023. The bank reported a 14.98 per cent increase in profit before tax from Sh17.1 billion in 2022 to Sh19.7 billion in 2023.

However, the bank faced a hike in operating expenses due to inflation and digital investments, and an increase in impairment losses on loans and advances. Despite these challenges, the bank maintained its credit quality and saw a rise in loans and advances due to increased client demand.

The bank also experienced a surge in customer deposits, indicating superior funding quality and high liquidity.
The bank’s earnings per share increased by 14.9 per cent from Sh31.47 in 2022 to Sh36.17 in 2023, while the dividend per share declared increased by 31.8 per cent from Sh22 in 2022 to Sh29 in 2023. This indicates enhanced returns for the bank’s shareholders.