Standard Chartered announced its Full Year 2023 financial results this morning and investors at the NSE are happy with what they see.
StanChart saw increases in revenue, profit, earnings per share, and increased its FY 2023 dividend payout. Shortly after the results hit the airwaves, NSE: SCBK share price rose by over 5%.
Breaking Down the Income Statement
A firm’s income statement is a snapshot of how a company generates revenue and how that money is spent.
FY 2023 witnessed a few key income statement movements for the bank that has operations in 53 countries across the globe.
- •Profit after tax increased 15% to 13.8B shillings.
- •Revenue increased 23% to 41.7bn shillings – attributable to a 32% in net interest income and a 6% increase in non-interest income.
- •Operating expenses also increased by 20% .
Earnings per share increased 15% to 36.2 shillings, up from 31.5 shillings in FY 2022
Breaking Down the Balance Sheet
A balance sheet acts like a health report on a company and particularly for banks. From StanChart’s balance sheet, we have learned a few key details that are of particular interest to an efficient SCBK investor.
- •Customer deposits grew by 23% to KShs. 342.9bn – KES denominated deposits increased by 13% while its foreign currency deposits increased by 37%.
- •Given recent fluctuations in USD/KES, foreign currency may have decreased at the moment, but that will only become clear when lenders release their H1 2024 results.
- •Non-performing loans (NPL) ratio strengthened with a 460 basis point decrease from 14.3% in FY2022 to 9.7% last year.
Other Noticeable Developments
Beyond the core financial statements, there are a few more things that investors should be aware of.
StanChart’s Board has recommended a KShs 23.0 final ordinary dividend to shareholders. Combining this with the 6.0 shilling interim dividend paid in December 2023, the total dividend payout for 2023 is KShs 29.0 – a 32% increase over 2022’s KShs 22.0 total dividend.
The Capital Adequacy Ratio (CAR), a measure of how well a bank can meet its obligations, increased by 56 basis points from 17.28% to 17.84%.
One of the features of this morning’s report was more qualitatively on the performance of the bank’s four pillars: Network, Affluent, Mass Retail, & Sustainability.
- •The Network pillar saw advancements in the bank’s global trade corridors including Europe (45%), America (27%), and Middle East & Asia (20%) increases in revenue.
- •The Affluent pillar witnessed a 29% increase in revenue from the High Net Worth Individuals segment.
- •StanChart’s Mass Retail pillar has been driven hard by the bank’s approach to digital, seeing a total of 84% of loans and credit card acquisitions through its app.
The bank also made significant strides in advancing its sustainability pillar last year with well over a quarter million trees planted, solar installations at 4 major branches, and a 27% reduction in carbon emissions from the company’s 2021 baseline.
All these factors considered, StanChart had a strong 2023 with noticeable achievements in nearly all aspects of both financials and driving the company’s strategic pillars.
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