NAIROBI, Kenya, Mar 4 – Standard Chartered Bank has announced a 46 percent increase in profit after tax to Sh4.7 billion for the year ended December 31 2009.
Chief Executive Officer Richard Etemesi credited the performance to the continued focus on banking strategies which involves credit risk management, cost control and efficient customer service as well as infrastructure development.
“We have made substantial investments in our systems infrastructure and introduced technology-based products and services to ensure that we are fit for growth,” he explained.
Total income was up 22 percent to Sh12.4 billion while the loans and advances went up by 31 percent to Sh56.7 billion. The institution’s nonperforming loans as a proportion of total loans stood at 2.5 percent compared to 3.9 percent in 2008.
“Interest income from investments in government sercurities increased by 40 percent to Sh894 million largely on account of increase in volumes that contributed to Sh855 million of the increase,” he said.
The board of directors has recommended a dividend of Sh12 per ordinary share.
The bank, which will be marking 100 years since it started its operations in Kenya in 2011, has over the years adopted a conservative business model which has seen it stay away from venturing into the rural areas like some of its competition.
Although some industry players initially argued that this reluctance to bank the masses would negatively impact the bank and result in a declining market share, these predictions have not come true.
Instead, their strategy seems to be paying off as it seems to have weathered the storm.
“We did business in market segments we knew intimately and with products we fully understood. We continue to remain disciplined on costs,” said the CEO at an investor briefing.
He expressed concerns over the current political uncertainty which he said was likely to affect the business environment.
However, Mr Etemesi said the bank is liquid and well capitalised and that coupled with their well diversified retail funding base, would enable the bank to register positive results in 2010.
“We have a very strong liquidity position and a healthy loan deposit ratio of 65 percent that gives us good headroom to grow loans and advances. Our capital and liquidity ratios are well above target ratios set by the Central Bank of Kenya,” he added.
While cautious about the outlook of the future, he exuded confidence that the bank would continue to execute its strategy, which he pointed out had huge potential to further grow the business.
Already, the year is looking up for the bank with the income and profits posted in January and February being higher than those registered in 2008.