Stanbic Holdings Plc has announced a KES 12.2 billionprofitafter tax and a total dividend payout equivalent of 50%of its earnings for the financial year ended December 31, 2023.
The financial services provider with operations in Kenya and South Sudan, attributed the 34% year on year growth to improved net interest margins, balance sheet growth and strong trading revenue.
Stanbic Bank Kenya and South Sudan Chief Executive, Joshua Oigara said that the results reflected the Bank’s resilience amidst a tough operating environment.
“Despite facing a challenging business environment marked by heightened currency and inflationary pressure, rising interest rates and geopolitical tensions, the Group delivered strong financial results. This demonstrates resilience in our business model underpinned by diligent execution of our strategy. We remain committed to our purpose of driving Kenya and South Sudan’s growth, more so as we transition to our new 3-year strategy,” said Dr. Oigara.
The Nairobi Securities Exchange listed lender saw its net interest income grow by 35% to KES 25.6 billion driven by a healthy balance sheet growth and expansion in margins on its interest-earning assets. Customer deposits rose by 18% to KES 321billion, while loans and advances increased by 10% to KES 261 billion, underscoring the Bank’s commitment to growth of its customer franchise.
Non-interest income was buoyed by foreign exchange revenue, driven by increased volumes and better margins. Additionally, investment banking fees and mobile money fees played a significant role.
In the period under review, the costs-to-income ratio stood at 43.5% down from 46.7% in the previous year, evidencing continued focus on efficiency in the business. The Group reported positive JAWS of 8.6% while return on equity (ROE) improved to 18.6%, up from 15.3% in the previous year.
The Bank’s Chief Financial and Value Officer Mr. Dennis Musau noted that the Bank’s previous three-year strategy delivered the envisioned goal of a sustainable growth trajectory with all the key metrics depicting better returns.
“Today’s results are demonstrable proof that our three-year strategy yielded a positive and sustainable growth trajectory delivering 39%, 26% and 34% growth in profitability in 2021, 2022 and 2023 respectively. Our deliberate focus on transforming client experience, institutionalising operating efficiencies and focus on sustaining our returns are the underlying pillars to these outcomes,” he said.
Stanbic has unveiled its new corporate strategy which provides a platform built on the growth momentum established in the last three years. The reimagined strategy will focus on highly impactful initiatives which will strategically position it as a significant player in the market. The new strategy continues to anchor on three strategic priorities: transforming client experience, executing with excellence and driving sustainable growth and value.
Stanbic’s operation in South Sudan also remained profitable amidst a challenging operating environment. The focus on South Sudan is premised on intermediating currency flows and payments for its clients. Its other subsidiaries namely SBG Securities Limited and Stanbic Bancassurance Intermediary Limited also delivered double digit growth in 2023.
Stanbic Bank embeds social, economic, and environmental considerations into its lending decisions and business practices to advance sustainability and value for society.
During the period under review, the Group’s non-profit arm – Stanbic Kenya Foundation (SKF) – ramped up its impact initiatives in education, healthcare, and economic empowerment, achieved through partnerships with various organizations namely: Deutsche Gesellschaft für Internationale Zusammenarbeit GmbH (GIZ), US African Development Foundation (USADF) and various County Governments in Kenya.
Over 500 Micro, Small and Medium Enterprises (MSMEs) received catalytic funds and grants. In addition, the partnership with GIZ provided a training and coaching platform for MSMEs where over 900 businesses received training and 69 benefited from one-on-one coaching sessions. On the healthcare front, over 30,000 Kenyans across 5 counties have benefited from free cancer screening over the last 4 years courtesy of SKF in partnership with Africa Cancer Foundation (ACF), Kisumu Medical and Education Trust (KMET) and various county governments.
Stanbic is supporting Kenya and South Sudan transition to a lower carbon economy. The bank is working with its clients to enable mitigation of climate change, and to improve access to reliable and sustainable energy sources, a critical factor in Kenya and South Sudan’s economic growth and poverty alleviation. To this end, Stanbic Bank was part of a consortium of financial institutions that provided funding for a KES 15 billion sustainability linked loan facility (SLL) to one of its clients. The deal also paves the way for further sustainability financing in the region as companies seek to become more accountable for their ESG reporting and financing.
The Bank received several recognitions the financial year under review. Some of the awards are the best Kenyan investment bank (for the 11th consecutive year), East Africa Investment Bank of the Year 2023 at the Bonds, Loans & ESG Capital Markets Africa Awards, Best CSR Bank in Kenya by Global Brands magazine, National Diversity and Inclusion Awards & Recognition (DIAR) for DADA under Best Impact Investing Initiative and the Best Sub-Custodian Bank 2023 by Global Finance magazine.