Standard Chartered Reports 19% Jump In Q1 Profit At KSh2.39 Billion

Shares of Standard Chartered Bank Kenya gained 0.19  per cent to 131.75 per share on the NSE on Monday after the bank’s net profit grew 19 per cent to KSh2.39 Billion in the March quarter of FY21, as against KSh2.01 billion in Q1FY20. 

The lender attributed the rise in net profit to an improvement in non-interest income and a decline in operating expenses. 

Non-interest income rose to KSh1.999 billion in the three months through March 2021, from KSh1.905 billion in the same period a year ago. 

The bank’s interest income fell by 9 per cent to KSh 5.563 billion in March 2021 from KSh6.102 billion in March 2020.

Other highlights

Earnings Per Share (EPS) increased to  KSh 6.22 from KSh 5.73 over the same period in 2020.

Total Assets increased 8.9 per cent to KSh 339.3Bn supported by 23.3 per cent growth in Cash (both local and foreign) to KSh 3.8Bn. A 9.9 per cent growth in holdings of government securities to KSh 98.2Bn.

Loan and advances declined 6.1% over the period under review to KSh 117.9Bn.

Customer deposits increased 8.9% to KSh .265.2Bn compared to KSh 243.6Bn Q1 2020.

Non-Funded Income (NFI) down 11% to KSh 2.5Bn (Q1 2020 – KSh.2.2Bn) as a result of a 10.7% dip in fees and commissions on loans and advances.

Loan loss provisions down 3.5% to KSh 413Mn (KSh 428Mn Q1 2020), resulting in a 9% drop in total operating expenses.

Asset Quality – Gross Non-Performing Loans (NPL) increased 11.3% to  KSh 22.3Bn from KSh 20Bn due to increased customer defaults as a result of the impact of the Covid-19 pandemic.

Non-Performing Loan (NPL) Ratio stood at 11% in q1 2021 compared to 9.7% over the same period in 2020.

Commentary from analysts

The bank is currently sufficiently capitalized with a core capital to risk-weighted assets ratio of 15.9%, 5.4% above the statutory requirement. In addition, the total capital to risk-weighted assets ratio was 18.3%, exceeding the statutory requirement by 3.8%. We maintain our BUY recommendation on SCBK at a fair value estimate of KSh 152.36, Genghis Capital.

The bank is currently sufficiently capitalized with a core capital to risk-weighted assets ratio of 15.9%, 5.4% above the statutory requirement. In addition, the total capital to risk-weighted assets ratio was 18.3%, exceeding the statutory requirement by 3.8%. We maintain our BUY recommendation on SCBK at a fair value estimate of KSh 152.36, Sterling Capital Research.