Stanbic Holdings net profit for H1 2025 declines to Sh6.5 billion

Stanbic Holdings Plc’s Profit After Tax  in the half year ended 30th June 2025 declined by 9 per cent to Sh6.5 billion from Sh7.2 billion for the previous period, largely impacted by lower net interest income and elevated operating expenses, primarily due to prior year base effects.

The company, however, delivered a return on equity of 17.4 per cent, supported by active capital and liquidity management across the portfolio.

The performance was underpinned by resilient non-interest revenue generation and lower credit impairment charges, which helped cushion the impact of a decline in net interest income.

The listed lender, which has operations in Kenya and South Sudan, noted that while year-on-year organic growth remained subdued, its continued focus on operational excellence and robust risk management enhanced its fortitude and strengthened its long-term growth outlook.

During the period, Stanbic recorded a 9 per cent increase in active clients, driven by the continued optimisation of its products and digital platforms. This growth, coupled with targeted client support initiatives, strengthened the Bank’s credit position, contributing to a 4 per cent expansion in the balance sheet from the December 2024 closing position.

Speaking on the half-year performance, Dr Joshua Oigara, the Chief Executive, Stanbic Bank Kenya and South Sudan, stated: ‘’ The Kenyan economy remained stable amidst persistent headwinds. Nonetheless, some pressures persist as evidenced by sluggish private sector credit uptake, high fiscal deficits and geopolitical risks. Our focus in this period was largely on supporting our clients navigate shifting market conditions, while fortifying our growth through robust risk management,  capital strength and well managed liquidity levels. We believe that our business will continue to demonstrate resilience and keep momentum even as the market continues to post recovery.’

On his part, Dennis Musau, the Stanbic Bank Chief Financial and Value Officer, said: ‘’ Our H1 2025 results signal steady progress, anchored in a stable macroeconomic climate and recovering private sector credit growth. Commercial lending to the private sector grew by 2.0 per cent in May, up from a contraction of 2.9 per cent in January—signalling a rebound in demand alongside easing interest rates. We continue to refine our strategic focus, leveraging our core strengths to unlock long-term value and deliver sustainable returns for our shareholders in an evolving market landscape.’’

“The Bank recorded an NPL ratio of 9.5 per cent, which is below industry levels at 17.6 per cent, and representative of a healthy asset book. ‘’ Credit quality is a priority for us, which is why we have adopted a proactive, data-led approach to managing risk. We have strengthened our credit assessment frameworks and developed sector-specific models that enable us to better anticipate and support clients during volatile cycles,” Musau added.

Financial Performance Summary:

• Profit after tax declined by 9 per cent to Sh6.5 billion, largely impacted by lower net interest income and elevated operating expenses, primarily due to prior year base effects.
• Trading revenue contracted by 7 per cent, reflecting the impact of narrower margins in the current period.
• Customer numbers grew by 9 per cent, driven by effective market positioning and continued investment in customer experience.
• Other non-interest revenue excluding trading revenue rose by 9 per cent, supported by higher customer transaction volumes and a more diverse suite of product offerings.
• Operating expenses increased by 16 per cent, attributable to 2024 base effects, driven by the appreciation of the Kenya Shilling as well as investments in long-term strategic initiatives.
• The cost-to-income ratio stood at 48.1 per cent, reflecting a contraction in total income alongside elevated cost levels.
• Credit impairment charges decreased by 26 per cent, underlining enhanced risk management practices and improved credit portfolio quality.
• Customer deposits closed at Sh330 billion, a 4 per cent increase from December 2024, while loans and advances stood at Sh233 billion, representing a 1 per cent growth over the same period.

The Bank also reduced its lending rates by 180bps cumulatively in response to Kenya’s easing monetary policy stance.

During the reporting period, all four business lines demonstrated robustness and strategic execution with Corporate and Investment Banking playing a key role in facilitating a new US$ 1.5 billion Eurobond issuance for Kenya reinforcing the bank’s leadership in sovereign advisory.

Business and Commercial Banking continued to support the real economy, disbursing Sh16.4 billion in loans to SMEs across various sectors while Personal and Private Banking achieved a fourfold increase in scheme disbursements, reflecting growing client demand and effective distribution. We also made significant strides in digital banking, with the enhancement of our Omni Channel mobile app, introducing key features that drove active users beyond 100,000 mark.

The Insurance and Asset Management business maintained positive momentum, with assets under management surpassing Sh4 billion (in nine months since launch), underscoring the strength of our diversified financial services offering.

Notably, Stanbic Bank, the company’s main subsidiary, was ranked among the top 5 banks in SME lending by the Kenya Banker’s Association, with the lender allocating capital to impact sectors, including agriculture, manufacturing, and trade, delivering both returns and national development outcomes in the first half of the year. The Bank was also awarded the 2^nd runners up on the Best Bank to Borrow from and Best Bank in Mortgage Finance at the Think Business Awards.

 Strengthening Impact and Delivering Value 

Stanbic Bank said it continued to advance its sustainability agenda during the first half of 2025, directing funding and capacity-building efforts across four key impact areas: enterprise growth and job creation, infrastructure development and a just energy transition, climate change mitigation and adaptation, and financial inclusion.

Key sustainability achievements include:

• Issuance of Sh4.5 billion towards green infrastructure projects
• Lending of Sh1.2 billion to support climate-smart agriculture
• Disbursement of Sh900 million under the affordable housing programme enabling over 200 new homeowners
• Facilitation of Sh94.8 billion in trade loans, driving economic activity
• Planted 30,000 trees as part of climate change mitigation

Through the Stanbic Kenya Foundation, the Group deepened its social impact via strategic partnerships with GIZ, the Bill and Melinda Gates Foundation, American Tower Corporation, and Microsoft Corporation. These collaborations supported job creation, financial inclusion, and youth empowerment.

Notably, the Foundation disbursed Sh24 million in catalytic loans to MSMEs and delivered financial literacy and entrepreneurship training to over 33,000 women entrepreneurs across Kenya.

In recognition of this performance and commitment to shareholder returns, the Group has recommended an interim dividend of Sh3.80 per share, marking a 106.5 per cent increase year-on-year.