By Claire Wanja
Stanbic Holdings Plc has recorded Kshs 4.4 billion in after-tax profits for the year ended 31 December 2016.
This is an 10% decrease in net profit compared to the same period last year and has been attributed to a decrease in revenue in South Sudan operations and negative effects of hyperinflation accounting as well a decrease in SBG Securities revenues in the current year following decreased activity in the Nairobi Securities Exchange.
Speaking during an Investors’ breakfast to announce the full year results earlier Friday, Stanbic Bank Chief Executive Philip Odera said in addition to the unfavorable business condition in South Sudan for the better part of 2016, increased regulation in the banking sector coupled with depressed stock market activities had an impact on the Group’s performance.
“Growth in impairment charges due to increased general debt provisions aligned to challenging operating environment also affected our bottomline,” Mr. Odera said.
However the Group continued to report growth in balance sheet with customer deposits growing by 12% to Kshs 119 billion and customer loans growing by 19% to Kshs 115.5 billion, taking total assets to Kshs 214.6 billion.
Net interest income also increased year on year by 17% to Kshs 10.8 billion boosted by a 10% growth in customer loans and advances and improved margins within the first three quarters of the year. .
Trading income increased from Kshs 4.3 billion to Kshs 4.7 billion due to foreign exchange gains as a result of devaluation of the South Sudanese Pound. Net fees and commission income, however, declined slightly as a result of decrease in transactional volumes.
“The financial sector is still facing some critical changes ranging from the proposed new capital requirements in the Finance Bill by the Central Bank of Kenya, to
Change in US foreign policy following new Government regime to Brexit, but sector is resilient enough to overcome,” said Mr. Odera.
The business successfully concluded the rebranding process in October 2016 to Stanbic Bank Limited and Stanbic Holdings Limited respectively.