Stanbic Bank Kenya, the first lender to release its financial results for Q1 2025, reported a 16.6% drop in profit after tax to Kshs 3.3 billion, down from Kshs 4.0 billion in the same period last year. The performance was impacted by reduced lending activity, lower non-funded income, and a notable rise in operating expenses.
Summary of Performance – Stanbic Holdings Plc Q1 2025
- Profit After Tax (PAT) declined 16.6% to Kshs 3.3 billion, mainly due to a 13.6% increase in total operating expenses to Kshs 5.5 billion and a 7.1% decline in total operating income to Kshs 9.5 billion.
- Net Interest Income (NII) rose by 4.6% to Kshs 6.8 billion, up from Kshs 6.5 billion in Q1 2024, buoyed by higher returns on government securities.
- Non-Funded Income (NFI) fell sharply by 27.2% to Kshs 2.8 billion, from Kshs 3.8 billion, driven by muted market activity and subdued forex income.
- Total operating expenses rose 13.6% to Kshs 5.5 billion, driven in part by a 9.1% increase in staff costs, which climbed to Kshs 2.1 billion from Kshs 1.9 billion in Q1 2024.
- Total assets contracted by 8.4% to Kshs 450.1 billion, reflecting a 4.6% drop in net loans to customers, which stood at Kshs 244.0 billion.
- Customer deposits decreased by 5.0% to Kshs 337.6 billion, from Kshs 355.5 billion.
- Profit Before Tax (PBT) fell 25.3% to Kshs 4.1 billion, down from Kshs 5.5 billion in Q1 2024, marking a steeper decline than net profit due to increased tax efficiency.
- Borrowings surged by 40.4% to Kshs 17.0 billion, up from Kshs 12.1 billion, indicating increased reliance on debt funding amidst liquidity management measures. Capital and Liquidity Still Solid
Despite the earnings dip, Stanbic reported a total capital adequacy ratio of 18.6%, comfortably above the regulatory minimum of 14.5%. The liquidity ratio stood at 48.3%, indicating strong short-term funding capacity even as it edged lower from last year. Non-performing loans(NPLs) improved, with gross NPLs down by 5.2% to Kshs 22.9 billion down from Kshs 24.2 billion recorded in Q1’2024 and net NPLs after provisions improving by 34.3% to Kshs 4.4 billion from Kshs 6.7 billion recorded in the same period last year, showing tighter risk controls and better asset recovery.
Stanbic Bank is expected to prioritize prudent lending, maintain a diversified income base, and manage costs tightly in response to macroeconomic pressures. The board is relying on cautious lending practices and a varied mix of revenue sources to help stabilize the bank’s performance for the rest of the year. Moving forward, the bank is anticipated to prioritize conservative lending strategies and strengthen fee-based income to maintain financial stability.
