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Standard Chartered Tuesday announced a pre-tax profit of Kes 4.98 billion for the first half of 2017 buoyed by extensive innovation.
The Bank said the 33 per cent drop, year-on-year, reflects the effects of the Banking (Amendment) Act, 2016, which capped lending rates and introduced a floor on deposit rates, slowdown in economic activity in the run up to the general elections and an increase in the non-performing loan book.
Net interest income however, declined by 8 per cent to Kes9.2 billion down from Kes 10 billion during a similar period last year. Interest income on customer loans and advances at Kes6.9 billion saw a 12 per cent fall from the similar period in 2016 due to margin compression and lower average balance of loans and advances. The decline was partially mitigated by higher interest income from government securities.
The lender’s operating costs grew by 9 per cent to Kes 6.2 billion due to higher staff costs as well as implementation of the Digital by Design strategy which aims to migrate over 80 per cent of transactions to non-branch channels by 2020.
Standard Chartered has prioritized deployment of technology to promote efficiency and enhance risk management. In the last year, the Bank has introduced a Mobile app, a revamped online platform, fingerprint log-in technology, Video Banking and Cash Deposit machines.
Interest expense increased by 16 per cent from Kes3.0 billion in the first quarter of last year to reach Kes 3.6 billion as a result of higher deposit balances coupled with higher interest paid in line with the new regulation.