Stanbic Holdings Plc has posted a 13 per cent increase in net profit to Sh13.7 billion for the year ended December 31, 2024, as strong lending volumes, lower credit impairment charges, and cost efficiency measures helped offset higher funding costs and a decline in trading revenue.
The Group’s net interest income fell 5 per cent, weighed down by a 93% surge in interest expenses. However, a 27% jump in interest income to Sh48.2 billion, driven by a higher-yielding asset book and investment portfolio, partially cushioned the decline. Non-interest revenue dipped 1.7% due to narrowed margins and the absence of a one-off significant transaction recorded in 2023.
Despite economic challenges linked to reduced oil production due to the Sudan conflict, Stanbic’s South Sudan operations contributed Sh176 million in net profit, further bolstering the Group’s overall performance.
Joshua Oigara, the Stanbic Bank Kenya and South Sudan Chief Executive of Stanbic Bank said despite the income pressure, disciplined cost management and a reduction in credit impairments helped drive overall profitability.
“We had a robust performance in 2024, fueled by our ongoing focus on platforms, solutions, and processes that drive business growth while maximizing value for our stakeholders,” Oigara said adding: “Our investments in technology, talent, and innovative business strategies have positioned us to deliver resilient earnings and create a positive impact across Kenya and South Sudan.”
Resilient Balance Sheet, Higher Returns
The lender’s balance sheet remained largely stable, reflecting a measured approach to growth amid market volatility. Return on equity improved by 70 basis points, supported by the increase in profitability, while earnings per share rose 13 per cent.
Stanbic’s commitment to shareholder returns was evident in the Board’s decision to raise the dividend payout by 35 per cent to Sh20.74%, up from Sh15.35 in 2023.
“We deliberately shielded our customers from high credit costs by not passing the entire impact of rising funding costs to them,” said Dennis Musau, Chief Financial and Value Officer. “This helped not only grow our average lending through the period but also keep credit defaults and impairments below industry levels. Our continued focus on extracting efficiency from our operations continues to bear fruit, as evidenced by the 2% overall reduction in operating costs,” Musau added.
Digital Expansion and Sustainability Drive
The Group deepened its digital transformation in 2024, upgrading its core banking platform and revamping its mobile banking and securities trading applications. It also launched a new asset management business, which amassed Sh2.45 billion in Assets Under Management (AUMs) within six months.
The lender also ramped up its sustainability agenda, channeling Sh63 million in concessionary funding to small businesses, allocating 5 per cent of its loan book to green financing, and extending Sh9 billion in infrastructure development support.
The Group demonstrated its commitment to sustainable banking through robust environmental, social, and governance (ESG) practices. It screened 266 clients for environmental and social risks, achieved a 99.92% waste recycling rate, and processed 85 per cent of transactions digitally.
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