Stanbic Bank Kenya has once again set the pace for Kenya's banking earnings season, becoming the first major lender to declare results for the quarter ended 31 March 2026, a pattern the bank has maintained consistently in recent years.
- •The results show a recovery in core lending income, a milestone on deposits, and a deepening challenge in non-interest revenue.
- •Profit after tax grew 5.5% to KSh 3.52 Bn from KSh 3.33 Bn in Q1 2025, driven by a sharp improvement in net interest income and a 59.3% reduction in loan loss provisions to KSh 0.35 Bn.
- •Total operating income rose 4.3% to KSh 9.95 Bn, the first quarterly increase in operating income after a year in which full-year revenue contracted 3.1%.
The standout balance sheet milestone was customer deposits crossing KSh 400 Bn for the first time in the bank's history, closing the quarter at KSh 411.00 Bn, up 21.7% from KSh 337.63 Bn a year earlier.
Total assets grew 22.6% to KSh 551.72 Bn, with the loan book expanding 5.8% to KSh 258.16 Bn.
Asset quality continued to improve, with the NPL ratio falling 220 basis points to 14.9% from 17.1% in Q1 2025, and the liquidity ratio strengthening to 61.0% from 48.3%.
Net interest income grew 11.7% to KSh 7.57 Bn from KSh 6.78 Bn, but the growth was driven more by falling funding costs than by expanding lending revenue. Total interest income rose modestly to KSh 11.53 Bn from KSh 11.01 Bn, while total interest expenses dropped to KSh 3.96 Bn from KSh 4.23 Bn, meaning the NII expansion was largely a product of the liability side repricing faster than the asset side.
Deposit growth of 21.7% did not translate into proportionate interest expense growth, reflecting the full transmission of the CBK's 400 basis points of cuts since August 2024 into the cost of funds. The widening margin is real, but its durability depends on whether lending rates hold as the rate cycle stabilizes.
The FX Problem Deepens
Non-interest income fell 13.8% to KSh 2.38 Bn, marking the third consecutive year of quarterly decline in this revenue line. The driver is unambiguous: FX trading income has collapsed 83.5% from KSh 4.26 Bn in Q1 2023 to KSh 0.703 Bn in Q1 2026, as the Kenya shilling stabilized near KSh 129 to the dollar following its peak depreciation above KSh 156 in early 2024.
The bank has responded by growing FX transaction volumes aggressively, but margin compression has outpaced volume recovery for three years running. With the shilling expected to remain broadly stable in the near term, non-interest income recovery depends increasingly on fees, commissions, and bancassurance rather than currency volatility.
Total operating expenses fell 7.8% to KSh 5.03 Bn, providing additional support to the bottom line alongside the provisions improvement.
Earnings per share rose to KSh 20.61 from KSh 19.54 in Q1 2025. No interim dividend was declared, consistent with the bank's practice of declaring dividends at the full year.
