Corporate News
The drop in net profit for this year is attributable to a decline in income from its South Sudan branch. PHOTO | FILE |
NATION MEDIA GROUP
By GEORGE NGIGI, ngigi@ke.nationmedia.com
In Summary
- CFC is in the process of converting the South Sudan branch to a subsidiary following a good performance last year which was it first full year in operation.
CFC Stanbic Bank has
reported a 28 per cent drop in profit after tax for the three months to
March this year attributable to a decline in income from its South
Sudan branch.
The bank said it had made a net profit of Sh1.1 billion in
the first quarter of the year compared to Sh1.6 billion in a similar
period last year.
The lender's income from fees and commissions
dropped by Sh1.3 billion to Sh1.7 billion with income from foreign
currency trading taking the biggest hit.
“The drop was mainly due to a decline in fee and
foreign exchange revenues from the South Sudan branch. The current
political impasse, which manifested in December 2013, coupled with the
drop in global oil prices has hampered economic activity in the
country,” the bank's chief executive Philip Odera said.
CFC is in the process of converting the South Sudan
branch into a subsidiary following good performance in 2014, also its
first full year in operation.
The bank cut its operating expenses by Sh600
million to Sh2.1 billion but was not able to grow its net interest
income to fill the gap of lower non funded income.
Trading from foreign currency slumped to Sh536
million from Sh1.1 billion in March last year while other income –
usually from sale of treasury bills and bonds – fell to Sh611 million
from Sh1 billion last year.
Some of the expenditure lines that were cut include staff costs, loan loss provisions and other expenses.
Customer loans and advances were up by Sh2 billion
to Sh90 billion while its deposits rose to Sh105 billion from Sh96
billion in December.
CFC Stanbic becomes the first major lender to announce a profit dip this year with the others that have announced so far, Equity, KCB, Barclays and Co-operative Bank declaring double digit growth.
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