Standard Chartered Bank Kenya has maintained its interim dividend at Sh8 per share for the half year to June 2025, despite reporting a 21.3 percent fall in its net profit to Sh8.08 billion in the period, on lower income from forex trading.
The dividend distribution, which totals Sh3.02 billion, will be made on October 7, 2025, to shareholders on the register as at September 11, the bank said on Wednesday.
StanChart’s bottom line was hit by a 29 percent fall in non-interest income to Sh6.78 billion on the back of a 59.5 percent decline in forex trading to Sh1.99 billion.
Net interest income was down by 7.4 percent to Sh15.3 billion on account of declining interest rates in the economy, which resulted in an 18.2 percent fall in interest earnings from customer loans to Sh9.4 billion.
However, the lower rates helped lower the cost of customer deposits by 19.4 percent to Sh1.8 billion, softening the impact of the decline in lending income.
StanChart’s loan book expanded by 1.9 percent to Sh152.2 billion, while customer deposits went up by 5.1 percent to Sh290.6 billion.
The lender raised its holdings of government securities by 44 percent to Sh103 billion, while cutting its lending to other banks within the Standard Chartered Group by 36.5 percent to Sh74.5 billion.
“The non-interest income decrease of 29 percent came from a decline in transactional volumes and margins in transaction services, markets, and wealth solutions. This was partly mitigated by growth in trading income and wealth solutions,” StanChart Kenya Chief Executive Officer, Kariuki Ngari, said.
“Operating expenses remained flat with prudent cost management, investments to fund business growth, and digital capabilities continuing to deliver efficiencies,” he added.
Tier one banks have been reporting lower revenue from forex trading due to the shilling’s year-long stability versus the dollar at the Sh129 range. In the first quarter of the year, the banking sector as a whole saw a 53 percent drop in its forex trading income to Sh10 billion.
The stable rate and improved dollar supply have had the effect of reducing the margin between buying and selling prices quoted by banks and forex bureaus in the currency market.
The institutions earn their foreign exchange income from these margins when they buy from and sell dollars to customers.
At the height of the foreign exchange crisis in early 2024, the dollar’s buy-sell spread margin had gone as high as 13 units, but this has since come down to between 4.5 and Sh6.5 units among tier one banks, which control the bulk of the forex market.
Other tier one lenders that have reported their half-year numbers have also seen a dip in forex trading income.
Equity Group and Stanbic Bank reported forex trading income declines of 21 percent and 58.2 percent to Sh5.2 billion and Sh1.96 billion, respectively, while KCB Group and Co-operative Bank saw theirs go down by 48 percent and 41.6 percent to Sh5.19 billion and Sh1.55 billion.
I&M Group and Absa Bank Kenya reported declines of 8.1 percent and 14 percent in forex transaction earnings to Sh1.67 billion and Sh3.14 billion in the half-year period.
