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Stanchart posts Sh5.3b profit

NAIROBI, Kenya, Mar 7 – Standard Chartered Bank has registered a 13.3 percent rise in net profit to Sh5.3 billion for the year ended December 2010.

Total income was up 14 percent to Sh14.2 billion while customer deposits increased by 16 percent to Sh100.5 billion.

Chief Executive Officer Richard Etemesi said the performance points to the consistency in the implementation of their strategy, coupled with the close relationship they have cultivated with their clients.

"Much of what drives the Standard Chartered story remains constant.  Our strategy remains unchanged and our aspiration remains the same. We are putting even greater focus on our clients and customers, on building deep and long-standing relationships and on improving the quality of our service and solutions," said the CEO.

The increase is however way below what Stanchart\’s competitors such as Equity, Barclays Bank and KCB Group have posted over the same period which has represented over 50 percent growth in pre-tax profits.

This state of affairs however does not worry the bank which maintains that the growth is in line with its strategy.

The bank has been reluctant to enter into rural areas, a situation that has led some industry players to speculate that this has somewhat affected the institution\’s ability to strengthen its presence in the country.

But the CEO explained:"If you look at a three year Cumulative Average Growth Rate (CAGR), we are spot on because we don\’t measure our profitability on a year on year basis. We set our CAGR target over three to five years."

"Our CAGR over the last three years is 17.4 percent and that of the last five years is 22 percent which for a bank of our size is very good," he added.

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Mr Etemesi emphasised that they would continue to invest selectively in the business, which would in turn position the bank to take advantage of long term growth opportunities.

"We are looking to increase our priority centres with one on Chiromo Road and another along Mombasa Road. We are establishing a new one in Mombasa and another one in Kisumu," he added.

The board has recommended a final dividend payout of Sh8.50 per ordinary share.

The company\’s share is currently trading at Sh275 but Mr Etemesi said a share split is still not on the cards yet as the board feels that it is fairly priced. 

"The board considers the share split in relation to investor appetite. We look at the liquidity of the shares plus the return on equity and other matrix. Looking at those (indicators), they have remained fairly consistent and so there\’s unlikely to be a share split this year," the CEO said.

On its outlook, the bank remains positive about the future given that the fact that interest rates are likely to remain flat or only edge up marginally.

Mr Etemesi however acknowledged that the current political wrangling might impact negatively on the investment climate and urged politicians to tone down the noise.

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