Standard Chartered Bank has recorded a 20.5 per cent drop in its profits for the first quarter of the year 2017.
It’s net earnings in the period stood at Sh. 2 billion compared to Sh. 2.5 billion a year earlier.
Fees on transactions fell 10.1 per cent to Sh. 2.1 billion while operating expenses rose 5.7 per cent to Sh. 3.7 billion. The bank’s interest expenses also jumped 11.8 per cent to Sh. 1.7 billion, reflecting an 11 per cent increase in deposits to Sh. 205 billion.
The bank’s interest income dropped by a marginal one per cent to Sh. 6.3 billion.
“Though we entered 2017 with cautious optimism, pressure occasioned by external challenges particularly the Banking (Amendment) Act, 2016, is reflected in the performance as we witness deceleration in credit growth,” said CEO Lamin Manjang.
StanChart’s loan loss provisions increased six per cent to Sh. 772.3 million despite the stock of bad loans stagnating at Sh. 15.3 billion, reflecting a pessimistic credit outlook.
Financial statements for Standard Chartered Bank for the quarter up to March 30, 2017 show that interest income reduced by Sh68.9 million, while interest expenses went up by Sh180 million.