Stanbic Bank Kenya Limited’s Q3’2023 results, released recently, indicate a significant 32.7% growth in net profit, reaching KES 9.3 billion compared to KES 7.0 billion in Q3’2022.
Dr. Joshua Oigara, the CEO, attributes this success to the bank’s ability to capitalize on emerging market opportunities. As part of the Standard Bank Group, operating in 20 African countries and globally, Stanbic Kenya’s unaudited financial statements reveal a surge in pre-tax profit by 34.0% to KES 13.0 billion, up from KES 9.7 billion in Q3’2022.
The balance sheet also recorded a robust expansion of 11.5%, reaching KES 414.3 billion in Q3’2023, compared to KES 371.4 billion in the same period last year. The loan book increased by 5.9% to KES 251.0 billion, and customer deposits saw a 14.3% rise to KES 305.7 billion during the same period. Interest income experienced notable growth, increasing by 48.2% to KES 26.1 billion from KES 17.6 billion in Q3’2022. This growth was primarily driven by a 50.3% increase in interest income from loans and advances to KES 20.2 billion from KES 13.4 billion in Q3’2022, along with a 209.7% increase in interest income from deposits and placements to KES 2.1 billion from KES 0.7 billion in Q3’2022.
In contrast, interest expenses rose by 63.2% to KES 8.0 billion from KES 4.9 billion in Q3’2022. This increase was mainly driven by a 49.0% rise in interest expense on customer deposits to KES 6.1 billion from KES 4.1 billion in Q3’2022, coupled with a 132.8% increase in interest expense from other interest expenses to KES 1.0 billion in Q3’2023 from KES 0.4 billion recorded in Q3’2022.
Total operating expenses increased by 33.6% to KES 17.8 billion from KES 13.3 billion in Q3’2022. This was driven by a 56.8% increase in loan loss provisions to KES 4.5 billion from KES 2.9 billion in Q3’2022, along with a 16.2% increase in staff costs to KES 6.0 billion from KES 5.1 billion in Q3’2022. Despite the increase in loan loss provisions, Stanbic managed to reduce gross non-performing loans by 6.2% to KES 24.1 billion in Q3’2023, down from KES 25.6 billion in a similar period last year.
The lender achieved a Return on Average Assets (ROaA) of 2.9% and a Return on Average Equity (ROaE) of 21.4%, while the core earnings per share (EPS) grew by 32.7% to KES 23.5, compared to KES 17.7 in Q3’2022. This growth was driven by a 33.7% increase in total operating income to KES 30.7 billion, up from KES 23.0 billion in Q3’2022.
Listed on the Nairobi Securities Exchange, Stanbic’s current share price stands at KES 109.3, reflecting a 4.0% gain over its previous closing price on November 23, 2023, of KES 105.0. Starting the year at KES 102.0, Stanbic has demonstrated a 7.1% increase, despite the persistent challenges faced by the Nairobi Securities Exchange.
