Stanbic Holdings has reported a 19% reduction in full year net profit to Kshs. 5.2 billion and trimmed dividends by nearly half to Kshs. 3.80.
The lender which has become the first commercial bank to released its full year financial results attributes the profit decline to COVID-19 battered economy, subdued interest rates, weakening of the local currency and increased regulations.
As a result, and in line of the International Financial Reporting Standard 9 (IFRS9) preparation of financial statements, the lender increased its loan loss provision Stanbic Holdings increased its loan loss provision by 41.78% to Kshs. 9.84 billion after the stock of non-performing loans hit Kshs. 25.04 shillings.
“Despite a challenging operating environment, I am proud that Stanbic stood shoulder to shoulder with our clients and the Kenyan community when it really mattered the most. We supported clients through our DADA proposition where we onboarded over 10,000 women while issuing loans worth Kshs. 844 million to support them and their businesses,” said Charles Mudiwa, Stanbic Bank Kenya Chief Executive Officer.
According to Mudiwa, the lender issued loan moratoriums to 7,200 clients and restructured loans worth Kshs. 40 billion.
Of the total loan restructured during the period, Small and Medium Enterprises (SMEs) accounted for Kshs. 3.1 billion.
Stanbic adds that through its insurance franchise, over 400 retrenchment claims were fully paid to assist clients weather the challenges presented by COVID-19.
Waiver on charges levied on digital platforms also saw the lender forego Kshs. 283 million in fee revenue and lowered interest rate in line with regulations saving customers Kshs. 665 million in interest thereby reducing the interest income for the lender.
Interest income from loans and advances was down 8.6% to Kshs. 14.37 billion which was lifted by a 10% increase in interest income from government securities.
Total interest income dipped 3.4% to Kshs. 19.7 billion.
“The COVID-19 pandemic, has given us a unique opportunity to live our purpose, we recognize the need for inclusive and sustainable growth and environmental sustainability. In a fast-changing world, we recognize the need to adapt to evolving risks, optimise resource allocation and drive returns. In doing so, we will leverage our core strengths, while seeking new ways to expand our offering and diversify our revenue streams further,” Mudiwa added.
Shareholders who pocketed Kshs. 7.05 per share last year, will this year received less after Stanbic Holdings directors proposed a final dividend payout of Kshs. 3.80 per share.