Financial results:Stanbic profit grows slightly to Ksh.6.4B as restructuring trims earnings

Financial results:Stanbic profit grows slightly to Ksh.6.4B as restructuring trims earnings

BY JOAN WANJIKU,NAIROBI,2ND MARCH,2020-Stanbic Bank Kenya has posted a marginal 1.6 per cent growth in profit to Ksh.6.4 billion for 2019 with mid-year restructuring costs eating into the potential for higher earnings.

Operating expenses grew by 20 per cent to Ksh.13.9 billion as a result of the one-off restructuring costs to see its cost to income ratio (CIR) jump by 12 per cent.

Meanwhile, net interest income earned rose by 10 per cent to Ksh.13.3 billion with customer deposits and loans growing by one percent and four percent respectively in the period.

Stanbic shareholders are regardless of the marginal growth in profit set to receive a greater dividend pay-out totalling to Ksh.7.05 from Ksh.5.80 last year.

“We are signalling to the market that we have a solid business. The dividend pay-out commensurate with where we think shareholders should have gotten in their return,” said Stanbic Bank Kenya Chief Executuve Officer Charles Mudiwa said.

While the one-off restructuring costs ate into earnings, Mudiwa says the costs review has freed up new growth margins for the bank.

Stanbic undertook a review of business in mid-2019 from an increasing need to shape up to a rapidly changing financial sector.

From the review in the costing base, the lender released 88 employees via a voluntary early retirement (VER) program whose costs to the company stood in excess of Ksh.773 million.

Stanbic has nevertheless created 35 new roles in data science as the bank speeds up its quest for greater digitization.

80 per cent of the bank’s cash deposits are now automated while 70 per cent of all new accounts opened with the bank are being processed on digital platforms.

The quest for digitization has continued to push the bank’s non-interest funded income which settled at a higher Ksh.11.4 billion for the year on increased fees from electronic banking.

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