Stanbic Bank, a prominent financial institution operating in Kenya and South Sudan, has demonstrated remarkable resilience in the face of challenging economic conditions. The bank reported a 2% increase in profit after tax, reaching Sh7.2 billion for the half-year ending June 2024. In a move that signals confidence in its financial stability, Stanbic has declared an interim dividend of Sh1.84 per share.
Joshua Oigara, Chief Executive of Stanbic Bank Kenya and South Sudan, described the first half of 2024 as a “mixed economic landscape.” While the appreciation of the Kenyan Shilling against the US Dollar provided some economic stability and bolstered foreign exchange reserves, the country faced significant challenges. Severe floods between March and May caused extensive damage to infrastructure, agriculture, and homes, disrupting economic activities and necessitating substantial recovery efforts. The latter part of the half-year was further complicated by civil protests, adding to the economic uncertainty.
Despite these obstacles, Stanbic Bank’s financial performance remained strong. The bank’s net interest income grew by 4% to Sh12.6 billion, driven by an improved average lending book and higher asset yield. This growth contributed significantly to the overall profit increase.
One of the most notable achievements was the substantial expansion of the bank’s balance sheet, which grew by 30% from Sh384 billion to Sh498 billion. This impressive growth underscores the bank’s strategic focus on key sectors and its ability to capitalize on market opportunities even in challenging times.
Stanbic Bank also demonstrated effective cost management, with operating costs declining by 7% during the period. This efficiency drive helped offset some of the economic pressures and contributed to the overall profit growth.
Customer confidence in Stanbic Bank remained strong, as evidenced by a significant 39% increase in customer deposits, which rose to Sh360 billion. This surge in deposits not only provides the bank with a stable funding base but also reflects the trust and loyalty of its client base.
Dennis Musau, Stanbic Bank’s Chief Financial and Value Officer, emphasized the bank’s role in fostering economic growth. “Our operating results indicate that we continue fostering economic growth, as evidenced by significant growth in the balance sheet driven by investments in key strategic sectors to catalyse sustainable economic development,” Musau stated. He further added, “The strong growth in customer deposits is a testament to the trust our clients have in us and validates our significant investments in enhancing the customer experience.”
The bank’s performance is particularly noteworthy given the economic challenges faced by Kenya and the broader region. Stanbic’s ability to maintain profitability and grow its balance sheet demonstrates its robust business model and strategic adaptability. It also highlights the critical role that well-managed financial institutions play in supporting economic stability and growth, even when faced with significant external pressures.
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