Standard Chartered Bank Kenya has announced a 19 percent drop in pretax profit of $30 million for the first quarter of 2017 saying the drop was as a result of the rate caps introduced in 2016.
Net interest income declined by 5 per cent to KShs 4.6 billion down from KShs 4.9 billion during a similar period last year. Interest income on customer loans and advances at KShs 3.6 billion saw a 7 per cent fall from the similar period in 2016 due to margin compression and lower average balance of loans and advances.
Interest expense increased by 12 per cent from KShs 1.5 billion in the first quarter of last year to reach KShs 1.7 billion as a result of higher deposit balances coupled with higher interest paid in line with the new regulation. Loans and advances to customers declined by 5 per cent to stand at KShs 117 billion compared to KShs 123 billion at the close of 2016.
Customer deposits increased by 10 per cent to reach KShs 205 billion compared to KShs 187 billion at the end of 2016. Non-interest income decreased 10 per cent year-on-year to KShs 2.1 billion primarily due to lower foreign exchange volumes coupled with low custodial flows from subdued performance in the Nairobi Securities Exchange.
Operating costs grew by 6 per cent to KShs 3.0 billion as loan impairments grew by 6 percent year-on-year to KShs 772 million with Gross non-performing loans increasing marginally to KShs 15.4 billion from December 2016.
