Standard Chartered Bank Kenya has cut its dividend per share for the first time in five years after net profit for the financial year ended December 2025 fell by 38 percent to Sh12.43 billion on higher costs and lower income from lending and transactions.
The lender announced on Wednesday it had lowered the distribution to shareholders to Sh31 per share, totalling Sh11.71 billion or 94.2 percent of the net profit. This compares with the Sh45 per share paid on Sh20.06 billion net profit posted a year earlier.
Shareholders had received Sh8 as interim dividend and now the lender has trimmed the final distribution per share to Sh23 compared with Sh37 paid on the 2024 performance. The final dividend is subject to shareholder’s approval during the upcoming annual general meeting.
This marks the first time in five years for the lender to reduce dividends.
Dividends have been growing since 2021 when it raised the per share distribution to Sh19 from Sh10.50 paid in 2020 when the economy was battling Covid-19 pandemic disruptions. The distribution per share stood at Sh22 in 2022 and Sh29 the following year.
Net interest income for the year ended December 2025 fell by 13.1 percent to Sh28.89 billion while non-interest income reduced by 23 percent to Sh13.41 billion, cutting the operating income by Sh8.37 billion.
“Net interest income decreased 13 per cent due to margin compression on the back of declining interest rates. The decline has partially been mitigated by lower cost of funds on customer deposits,” said Kariuki Ngari, the outgoing CEO at StanChart.
“Non-interest income decreased 23 per cent from a decline in transactional volumes and margins in transaction services and market.”
StanChart saw its operating expenses rise by Sh2.99 billion or 13.3 percent to Sh25.46 billion as staff costs surged to Sh11.19 billion from Sh9.05 billion, partly on the settlement of a Sh2.6 billion legacy pension liability.
“Underlying expenses increased four per cent to fund business growth and digital capabilities. In addition, we incurred a one-off employee past service cost of Sh2.6 billion in relation to the pension case,” said Mr Ngari.
StanChart had issued a profit warning in mid-August last year, stating that the pension case was going to contribute to the decline in net earnings. This came after the Supreme Court dismissed its appeal in a 16-year dispute, ordering a payout of about Sh7 billion to 629 former employees.
The case centred on the 1999 conversion of the lender’s pension scheme from a defined benefit to defined contribution, which the court found led to undervalued pension payments.
StanChart is set for a new CEO and chief finance officer (CFO) in the coming months.
Mr Ngari is retiring on April 16, 2026, after a 24-year career with the bank and will be replaced by Birju Sanghrajka. Chemutai Murgor will exit the CFO role on May 31, 2026 to pave the way for Gladys Warirah.
“I wish Birju Sanghrajka every success as he takes on the leadership of the bank. He steps into this role with a strong foundation, and I am confident that his energy will propel the bank to greater heights,” said Mr Ngari.
