Stanbic Holdings received a $30 million (Sh4.1 billion) subordinate loan from its South African-based parent firm Standard Bank in the year ended December to boost its capital.
Stanbic Bank Kenya, the main operating subsidiary of Stanbic Holdings, was the biggest beneficiary of the loan.
“Counterparties and covenants to the subordinated debt facilities are as follows … USD 30 million obtained from Standard Bank of South Africa in 2022. There are no covenants relating to this financing,” Stanbic Holdings says in its latest annual report.
The loan, which was disbursed on September 28, 2022, has an interest rate of 9.38 percent and matures on September 30, 2032.
It adds to an earlier $30 million loan from Standard Bank that was issued in February 2018.
Stanbic Kenya’s supplementary capital rose to Sh9.86 billion in the quarter ended September 2022, up from Sh6.77 billion in the quarter ended June 2022. This represented an increase of Sh3 billion.
The jump in capital has enabled the bank to grow its business including expansion of its loan book.
The bank posted an 84.3 percent growth in its first quarter profit to March with net earnings hitting Sh3.89 billion from the previous Sh2.11 billion.
The rise in profitability is attributable to the higher total operating income which rose 64.7 percent to Sh11.15 billion.
Non-interest-funded income grew at the fastest pace, having posted an 89.4 percent rise to Sh5.74 billion.
Forex trading income was the primary driver for the non-funded income having grown by 2.4 times to Sh4.26 billion.
Stanbic’s net interest income meanwhile grew by 44.9 percent to Sh5.42 billion from Sh3.74 billion previously.
The growth in interest income was partially anchored on an 11.7 percent loan book growth to Sh230.7 billion.
The bank’s customer deposits meanwhile grew twice as fast or by 23.8 percent to reach Sh291 billion from Sh235.11 billion.
Non-interest expenses nevertheless spiked in the period to push up Stanbic’s cost base as provisions for bad loans soared by 132 percent to Sh1.14 billion from a lower Sh491 million a year ago.
The growth in the cover for bad loans is attributable to a jump in gross non-performing loans and advances which hit Sh29.29 billion in the quarter ended March from Sh24.56 billion in the corresponding 2022 period.
The bank has stated it maintains a strong growth momentum on all revenue streams going into the half year period that ends next month.
