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Stanbic Bank net profit down 10pc to Sh4.4b


Revaluations of assets in South Sudan and a build-up of bad loans in Kenya contributed to cutting Stanbic Bank Group’s profits by 10 per cent.

The lender recorded a Sh4.4 billion net profit for the year ending December 2016, down from Sh4.9 billion in 2015.

The drop in revenue from South Sudan operations  owing to  political unrest continued to hit the economy, ultimately eating into the bank’s profits.

Gross bad loans went up from Sh4.8 billion to Sh7 billion forcing the bank to allocate a provision of Sh1.7 billion as an impairment cost.

“Net NPLs have increased by Sh1.6 billion mainly in the manufacturing, trade and agriculture sectors,” Stanbic Bank’s Chief Finance Officer Abraham Ongenge said yesterday.  Mr Ongenge, however, said the bad loans were incurred in areas where the bank had sufficient security to cover for the risks.

“The NPLs are in manufacturing trade and agricultural sector and among specific clients and we are confident that we will resolve the over time but there is also the security if we need to realise that as a last resort,” Mr Ongenge said.

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The agricultural sector has been hit by dry weather conditions casting doubts over whether the backbone of the country’s economy will sustain growth. Traders on their part have had to deal with expensive credit and slowed business transactions.

Stanbic Bank Chief Executive Philip Odera was, however,  optimistic about future growth.

Odera said Stanbic Group customer deposits grew by 12 per cent to Sh119 billion while customer loans grew by 19 per cent to Sh115.5 billion.

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