Standard Chartered Bank Kenya Plc reported a 13.5% decline in net profit to KSh 4.86 billion for the first quarter of 2025, marking its first earnings contraction in recent years.
This dip follows KSh 5.61 billion in profit after tax recorded during the same period in 2024.
The primary driver for the profit reduction was a significant 59.1% plunge in forex trading income, which negatively impacted overall non-interest revenue.
Total operating income consequently fell by 11.2% to KSh 11.60 billion, reversing the double-digit growth over the past two years.
While net interest income remained relatively steady at KSh 8.21 billion, slipping just 0.8% year-on-year, non-interest income sharply decreased to KSh 3.39 billion from KSh 4.79 billion in Q1 2024.
In addition to reduced trading income, StanChart Kenya experienced a contraction in its net loan book (down 10.2%) and customer deposits (down 6.8%). This suggests a more cautious approach to credit deployment and evolving funding dynamics.
Despite the decline in profitability, the capital and liquidity buffers remain robust. The capital adequacy ratio rose to 20.63%, well above the minimum requirement of 14.5%, and liquidity improved to 73.64%, indicating a healthy cushion against near-term uncertainties.
Furthermore, loan loss provisions declined to KSh 0.41 billion, down from KSh 0.79 billion last year, reflecting stable asset quality. Operating expenses also saw a decrease to KSh 4.95 billion from KSh 5.42 billion in the prior year, contributing to mitigating the profit decline.
Dennis Musau, Chief Financial & Value Officer, reiterated the bank’s commitment: “We remain focused on partnering with customers, strengthening stakeholder relationships, and delivering sustainable, long-term value.”
Dr Joshua Oigara, Chief Executive, added, “We continue to assess market dynamics and remain flexible, positioning ourselves to navigate the year ahead and deliver sustainable value.”
Industry Context
StanChart Kenya’s results come amidst varied performances from other major Kenyan lenders in Q1 2025:
- Stanbic Bank Kenya reported a 16.6% drop in net profit for Q1, primarily due to a 27% shrinkage in non-interest income to KSh 2.76 billion, despite stable net interest income of KSh 6.78 billion.
- Co-operative Bank of Kenya (Co-op Bank) reported a 5.3% increase in first-quarter earnings, reaching KSh 6.9 billion. This was driven by a 21.7% jump in net interest income to KSh 14.2 billion, alongside an 8.3% growth in total assets to KSh 774.1 billion and a 9.0% rise in customer deposits to KSh 525.2 billion.
- KCB Group reported a flat net profit of KSh 16.5 billion in Q1 2025, maintaining momentum from last year despite mounting pressure on asset quality, with the non-performing loan (NPL) ratio hitting 19.3%.
- NCBA Group reported a net profit of KSh 5.5 billion in Q1 2025, up 3% year-on-year, driven by an 8% increase in operating income and an improved net interest margin of 6.1%. However, its balance sheet contracted, with customer deposits falling by 9.5% and total assets down by 5.6%.
