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Stanbic raises dividend 35pc as lower provisions boost earnings
Stanbic Bank Kenya and South Sudan CEO Joshua Oigara speaks during the lenders 2023 full year financial results briefing held at Serena Hotel in Nairobi on March 6, 2024.
Stanbic Holdings has raised its dividend payout by 35.1 percent to Sh8.1 billion after the net profit for the year ended December 2024 grew by 12.8 percent to hit the highest level in the lender’s history.
Net profit rose to Sh13.71 billion from Sh12.16 billion posted in the preceding year on lower provision for loan defaults, helping Stanbic to increase dividend per share for the third straight year.
The latest profit growth saw the Stanbic board recommend a raise in total dividend per share to Sh20.74 from Sh15.35, in what will also mark the highest ever payout in the history of the lender. The per share distribution for 2022 was Sh12.60 while that of 2021 was Sh9.
The increased dividend will see shareholders pocket a total of Sh8.1 billion or 59.2 percent of the net earnings, compared to the previous year when it paid out Sh6.06 billion or 49.9 percent of net profit.
The lender on Wednesday recommended a final dividend of Sh18.90 per share, which will amount to Sh7.47 billion. This will add to the Sh1.84 per share interim dividend amounting to Sh727.3 million that was paid in September last year.
Stanbic Holdings recorded a mixed performance across its commercial and investment banking subsidiaries.
While Stanbic Bank Kenya's net profit rose 18 percent to Sh13.5 billion, that of South Sudan was down 63 percent to Sh176 million before adjusting for hyperinflation.
Net earnings from Stanbic Bancassurance Intermediary fell 19 percent to Sh174 million, while SBG Securities’ net earnings dropped by 87 percent to Sh20 million.
Stanbic Bank Kenya and South Sudan CEO Joshua Oigara said shocks such as floods and anti-government protests as well as higher interest rates impacted the uptake of credit during the review period, with the group’s loan book dropping 17.2 percent to Sh294.7 billion.
“This was a year of resilience for us. In an environment where many shifts and shocks happened, a deceleration in industry credit is a concern that we must all get nervous about. But as [lending] rates come down, it is going to result in vibrancy in the economy and see an uptake of loans,” said Mr Oigara.
The group’s net interest income dropped by 5.1 percent to Sh24.34 billion on the back of interest expenses on deposits for Stanbic Bank Kenya rising 2.1 times to Sh21 billion.
Non-interest income also dropped to Sh15.4 billion from Sh15.67 billion mainly on reduced trading income, taking the group’s total income to Sh39.74 million from Sh41.31 billion.
However, operating expenses fell to Sh17.67 billion from Sh17.98 billion, aided by reduced provisioning for non-performing loans (NPLs), contributing to the rise in profitability. The NPLs provision fell by 50.2 percent to Sh3.09 billion.
“Revenue was down slightly. We would have loved to see that number grow but there were headwinds, including protests. This is a good result given what we went through. We want to build on them this 2025,” said Patrick Mweherie, regional chief executive of Standard Bank Group— the parent company of Stanbic Holdings.
Stanbic becomes the first lender to release its 2024 full year results, with others expected to do so before the end of the month.
