Stanbic Bank posted KSh 1.5 Billion net profit in the three months to March, becoming the first lender to release its Q1, 2020 financial results. The net profit dropped from KSh2.3 billion booked in the first quarter of 2019.
Stanbic’s Q1 financial performance is an indication of tough times in the banking sector in Kenya. Figures indicate that banks have restructured huge loans to customers in the ongoing global pandemic which has adversely affected businesses.
The lender’s balance sheet increased from KSh 284.9 Billion to KSh 309.7 Billion at the close of the first three months of this year.
Interest on loans to customers declined from KSh 3.9 Billion to KSh 3.6 Billion while earnings from Government paper fell to KSh 899.6 Million from KSh 1.1 Billion at the end of Q1, 2019.
However, Stanbic’s customer deposits increased marginally from KSh 1.2 Billion to KSh 1.3 Billion. Fees and commissions on loans declined to KSh 88.8 Million from KSh 96.6 Million in the period under consideration.
The lender’s portfolio of non-performing loans grew from KSh 13.5 Billion to KSh 16.3 Billion.
This sharp rise in bad loans shows the need for lenders to restructure customer loans, as stated by the Central Bank Governor Dr. Patrick Njoroge in March.