Standard Chartered Bank Kenya Wednesday issued a profit warning amid a growing volume of failing loans.
Board Chairman Patrick Obath warned that the bank expects to report a ‘substantial decline in the profit after tax for the year ending Dec 31. 2020.
As a result, it will report its annual results for the year in the first quarter of 2021.
“It has been a challenging year with the protracted heath pandemic and economic crisis, and against this backdrop, SCBK’s current performance forecasts indicate a substantial decline in the profit after tax for the year…” said Obath.
However, the lender remains confident that its balance sheet remains robust with strong capital and liquidity.
“The Board anticipates client demand will increase over the course of 2021 as Kenya and global economies open.”
They posted a 30.4% y/y drop in 3Q20 Earnings Per Share to Ksh 11.47 which was attributed to declines in both Net Interest Income (NII) (-2.4% y/y) and Non-Interest Revenue (NIR) (-8.8% y/y).
The lender’s loan loss provision surged 3.7 times to KSh2.7 billion in response to gross defaults rising 10.2 percent to KSh21.9 billion.
Its last financial year, it registered a Ksh8.24 billion net profit attributed to reduced interest expenses and provisions against bad debt.