Banks continued to announce decent profits for the year ending December 2018, helped by better income from government securities and tightening of operation costs.
This came even as earnings from loans and advances to the private sector continued its dismal performance, pointing to tough macro-economic conditions.
Standard Chartered Bank recorded a 17.1 per cent increase in net profit to Sh8.1 billion from Sh6.9 billion the lender made by the end of 2017.
Although loans and advances declined, interest income was nudged up by a 10 per cent increase in earnings from Government securities to Sh12.5 billion compared to Sh11.3 billion in the previous period.
StanChart’s loans to the private sector suffered a slight dip of three per cent to Sh13.6 billion in the period under review from Sh13.1 billion.
“The bank performed steadily in 2018 with encouraging progress on several fronts,” said Chief Executive Kariuki Ngare.
“We are investing in exciting new digital and other transformative initiatives, and our strengthened risk discipline is paying off. We are determined to drive commerce and help our clients achieve prosperity in a sustainable manner.”
It was the same with NIC Group whose profit after tax increased by 2.4 per cent to Sh4.1 billion in the period under review.
NIC, which is awaiting a merger with Commercial Bank of Africa, saw its income from Government securities increase 30.7 per cent to Sh6.9 billion from Sh5.2 billion.
A 14.4 per cent increase in total interest expense, from Sh7.6 billion to Sh8.7 billion, significantly ate into NIC’s total income.
Income from Government papers propped up the lender’s total interest income, which had been hit by a dip in earnings from loans and advances.
Despite loans advances declining by six per cent to Sh12.3 billion from Sh13.1 billion, total interest income increased to Sh19.3 billion. THE STANDARD
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