Stanbic Holdings reported a strong financial performance for the year ending December 31, 2023. The group’s net profit jumped 34% to Sh12.2 billion, compared to Sh9.1 billion in 2022. This growth was attributed to a significant increase in core lending activities and non-interest income.
The bank’s Chief Financial and Value Officer, Mr. Dennis Musau, noted that the bank’s previous three-year strategy delivered the envisioned goal of a sustainable growth trajectory, with all the key metrics depicting better returns.
“Today’s results are demonstrable proof that our three-year strategy yielded a positive and sustainable growth trajectory, delivering 39%, 26%, and 34% growth in profitability in 2021, 2022, and 2023, respectively.
Stanbic’s core lending business saw a 35% increase in interest income, rising from Sh18.9 billion to Sh25.6 billion.
In addition, fees, commissions, and foreign exchange transactions, categorized as non-interest income, grew by 19%, reaching Sh15.7 billion from Sh13.1 billion in 2022.
As a result, the bank’s total income climbed to Sh41.3 billion, up from Sh32 billion the previous year.
At Stanbic, we are proudly Kenyan with a clear purpose which is Kenya is our Home, we drive her Growth.
This informs everything we do as an organization as we are committed to the growth and development of Kenya, its people and industries. pic.twitter.com/kPokq5Vaoj— Stanbic Bank Kenya (@StanbicKE) March 6, 2024
However, credit impairment charges, reflecting potential loan defaults due to the lingering effects of the COVID-19 pandemic, also rose by 26% to Sh6.2 billion (from Sh4.9 billion).
Despite this, Stanbic’s effective risk management strategies and lending practices increased income after impairment charges to Sh35.1 billion from Sh27.1 billion.
Operating expenses grew by 20.2% to Sh18 billion (from Sh14.9 billion), primarily due to higher staff costs and depreciation.
However, efficient cost management practices allowed the bank to significantly increase its profit before tax, reaching Sh17.1 billion in 2022 compared to Sh12.2 billion in 2022.
Stanbic Holdings also saw a 15% expansion in its balance sheet, reaching Sh459.3 billion. This growth was driven by a 33% increase in customer loans and advances, totalling Sh356.2 billion.
Deposits from banks and customers also rose by 14% to Sh347.2 billion. The bank’s capital adequacy ratio remained above the regulatory minimum of 18.9%.
“The foundation of our success will be led by a strong risk and control environment, engaged employees, excellent client experience, and secure and convenient services, which will be a priority to achieve our goals,” Stanbic Bank Kenya and South Sudan Chief Executive Joshua Oigara said.
Stanbic Holdings declared a final dividend of Sh14.20 per share. The dividend brings the total dividend payout for the year to Sh15.35 per share, a 22% increase from 2022 and marking the highest dividend payout in the company’s history.
Investors responded positively to the group’s financial results, with the company’s share price jumping 7.6%, closing Wednesday’s trade at Ksh 123.75. This represents a year-to-date increase of 13.8%.
Additionally, Stanbic’s market capitalization rose by Ksh 3.5 billion.
