Stanbic Bank Kenya has reported a 16.6 per cent drop in net profit for the first quarter ended March owing to a shrink in non-interest income.
The subsidiary of Stanbic Holdings Plc reported a net profit of Sh3.3 billion for the three months ended March down from Sh3.9 billion a year earlier.
The lender’s non-interest income dropped 27.2 percent to Sh2.7 billion owing largely to earnings made from forex trading declining to Sh977 million from Sh2.3 billion in March 2024.
“We observe that all non-funded income line items improved on a year on year basis with the exception being forex trading income. This was expected in quarter one of 2025 given the significant reduction in forex margins especially with the relative stability of the Kenya Shilling during the period,” said Sterling Capital.
Stanbic’s net interest income rose slightly as a drop in interest from loans was counterbalanced by a drop in interest paid out to customers.
The lender’s interest income from loans dropped to Sh7.1 billion from Sh9.2 billion following a shrinking of its loan book by 4.6 per cent to Sh244 billion.
It paid Sh1.8 billion less to customers for their deposits with cash holding from the public dropping to Sh337 billion from Sh355 billion in March last year.
“The hit on interest income was expected as the tough macroeconomic environment forced the bank to lend cautiously coupled with the decline in lending rates,” said Sterling Capital.
Stanbic nearly doubled its holding of government securities, increasing its portfolio to Sh80.8 billion up from Sh41.8 billion.
The government securities earned Sh3 billion up from Sh1.3 billion. It increased the securities held for dealing as it seeks to take advantage of the decline in interest rates to trade the higher priced bonds which will fetch better prices in the market. Securities held for trading rose to Sh31.8 billion from Sh6 billion.
Stanbic signaled aggressive push in its core business as it grew its loan book by Sh13.7 billion in the three months between March and end of December 2024.
Customer deposits over the same three months rose by Sh16.1 billion indicating higher appetite to collect funds from the public as interest rates decline, making deposits cheaper.
Stanbic Bank Kenya is the most important subsidiary of Stanbic Holdings which is listed on the Nairobi Securities Exchange. The bank cut its support to other subsidiaries of the parent company with balances from banking institutions in the group slashed by nearly half to Sh57.9 billion from Sh106.8 billion.
