CfC Stanbic’s net profit for the six months ended June this year fell 42 per cent to Sh1.96 billion, weighed down by a difficult operating environment for its South Sudan business. Total income declined by 17 per cent to Sh7.73 billion on the back of a Sh1.64 billion fall in non-interest income to Sh3.34 billion.
The bank’s South Sudan operation’s main line of income is in form of fees and commissions, which have declined as the country’s economy has become bogged down by politically driven conflict.
“We have recorded the half year decline in profitability mainly due to decrease in revenue in our South Sudan operations as the effects of political unrest continue to impact the South Sudan economy,” said Cfc Stanbic chief executive officer Philip Odera.
The bank’s net fees and commission income dropped to Sh1.43 billion in the six months to June 2015 from Sh1.83 billion a year earlier, attributed to lower transactional volumes in South Sudan.
Trading revenue also fell, by Sh1.07 billion to Sh1.82 billion, due to low liquidity in the Kenyan bonds market and lower foreign exchange volumes in South Sudan.
The lender, however, grew its loan book by 28 per cent to Sh100.2 billion during the six month period, riding on increased customer deposits, which went up by 18 per cent to Sh112 billion.
The poor results saw the CFC Stanbic share on NSE free fall by as much as 8.91 per cent to trade at Sh. 92 per share. This made it the second biggest losing stock of the day during intra day trading session.
