Stanbic Bank net profit surges 34.2 per cent to Sh12.16 billion in tough economy

Stanbic Holdings has recorded an impressive surge in net profit of 34.2 per cent to Sh12.16 billion, marking the highest level in the company's history.

This stands in stark contrast to the projected decline for the Kenyan banking sector as a whole, with Central Bank of Kenya (CBK) data indicating a 7.3 per cent drop in pre-tax profits for 2023.

Stanbic has attributed its stellar performance to a significant rise in both its interest and non-interest income.

Loans and advances to customers witnessed a substantial increase, jumping from Sh266.83 billion to Sh356.2 billion by the end of December 2023.

This resulted in net interest income climbing from Sh18.9 billion to Sh25.6 billion.

Additionally, non-interest income, primarily generated through fees and commissions, rose from Sh13.14 billion to Sh15.67 billion, further bolstering overall earnings growth.

The positive performance translated into a windfall for shareholders. Stanbic Holdings announced a 21.8 per cent increase in dividend payout, reaching a record-breaking Sh6.07 billion.

This translates to a dividend per share of Sh15.35, the highest ever offered by the company.

Shareholders are expected to receive nearly half (49.9 per cent) of the net earnings compared to 55 per cent distributed in the previous year.

The final dividend of Sh14.20 per share, amounting to Sh5.61 billion, will be payable to shareholders registered on the company's books by the closure date of 17th May 2024.

While operating expenses for the group did rise from Sh14.97 billion to Sh17.99 billion, it was significantly outweighed by the surge in income.

Stanbic's exceptional performance sets a high bar for the remaining Kenyan lenders whose earnings reports are due before the end of March.

This positive development for Stanbic Holdings in a year marked by decline for the industry suggests the company may have found a winning formula.