The Standard Chartered bank popularly known as StanChart has become the first major bank in Kenya to report a profit dip in the first quarter of this financial year.
This is after KCB, Equity Bank, and Co-op Bank all recorded a profit gain.
StanChart has posted a 10.5 per cent decline in net profit to Sh. 1.84 billion in the first three months of trading ended March 31, 2018.
“Total operating income is up year-on-year. However pre-tax profit is down 7.7 per cent primarily due to higher costs from increased investment in our ‘Digital by Design’ strategy and loan impairment which is now on an IFRS 9 basis,” StanChart CEO Lamin Majang’ said.
Pretax profit fell from Sh3 billion to Sh2.77 billion even as interest income grew from Sh6.3 billion to Sh6.3 billion. However, the growth was weighed down by 16.5 per cent rise in interest expenses to Sh1.98 billion as a result of higher deposit balances.
Non-interest income increased 6.5 per cent year-on-year to Sh2.3 billion on the back of increased focus on non-funded income to diversify income streams. Operating expenses grew by 9.6 per cent to Sh3.3 billion largely due to implementation of the “Digital by Design” strategy which aims to migrate over 80 per cent of transactions to non-branch channels by 2020.