Standard Chartered Bank Kenya released its Q1 earnings, posting a 26.3% fall in Earnings Per Share(EPS)-an indicator of profitability- to KSh 9.47, as the lender’s topline faced pressure from thinner margins. The lender issued a profit warning for 2025 end year, due to its huge pensions bill.
The squeezed performance was partly attributable to a 23.3% contraction in net interest income to KSh 6.3bn, as interest income tapered at a faster pace compared to interest expenses.
Overall, Standard Chartered Bank operating income narrowed to KSh 10.0bn, as non-interest income edged higher by 10.3% to KSh 3.7bn.
Standard Chartered Bank Operating costs excluding provisions were contained at KSh 4.6bn, with loan loss provisions declining to KSh 327.0m on improved asset quality, partially cushioning the lender’s pre-tax profit at KSh 5.4bn, a drop of 23.3%.
The lender’s net interest income shrunk to KSh 6.3bn, with interest income slowing to KSh 7.2bn. This performance was partly linked to a decline in interest income from loans and advances, reported at KSh 3.9bn, largely attributable to margin compression despite a sizeable jump in lending
In particular, Standard Chartered Bank weighted average interest rate on loans and advances Interest from balances due from banking institutions rose by 23.1% to KSh 1.0bn, even as deposits and balances due from banking institutions declined to KSh 7.5bn and amounts due from Group to KSh 68.5bn.
Standard Chartered Bank key financial metrics
Interest income from government securities eased to KSh 2.3bn, likely due to lower government bond yields over the period (investment securities remained flat at KSh 103.6bn.
On the positive side, interest expenses declined by 15.1% to KSh 921.9m, supported by a 21.0% downturn in interest on customer deposits to KSh 809.8m as the bank hinges on low-cost deposits.
On the other hand, interest expenses on balances due to banking institutions swelled by 97.8% to KSh 96.2m, while other interest expenses increased to KSh 15.9m. Consequently, Standard Chartered Bank Kenya net interest margin tightened in 1Q2026.
Non-interest revenue rose by 10.3% in Q1 2026 to KSh 3.7bn, partly lifted by strong fee and commissions income. In particular, other fees and commissions increased to KSh 1.9bn, which is partly due to growth in fees related to Transaction Services, Global Markets, and Global Banking as well as Wealth Solutions business lines.
According to a report by Standard Investment Bank(SIB), fees and commissions on loans and advances declined by 38.5% to KSh 39.3m, which could be due to the implementation of the risk-based pricing formula and its considerations on how fees are calculated.
Foreign exchange trading income slid by 24.4% to KSh 780.4m, partly driven by reduced volatility and tighter margins in the FX market. Other operating income ascended by 34.1% to KSh 933.2m, which may have been driven by higher income from its bancassurance and wealth management business as well as securities trading.
Loan loss provisions came in at KSh 327.0m, thereby improving Standard Chartered Bank’s cost of risk metric
SIB in its outlook said the lender’s Q12026 performance points to a continued normalization of revenue on the back of lower market rates. Nonetheless, SIB view the lender’s commendable asset quality, cross-border network services, diversified investment options and non-banking revenue lines, Affluent Business pivot, access to capital pools (e.g., US$ 100m risk participation program with BII), digital and sustainability (earned KSh 3.5bn in 2025) proposition, and its global presence as key tailwinds to the Group’s revenue performance in the long term.
Furthermore, the low-cost deposit base amid lower interest rates (StanChart fully transmitted the CBR cut benefit to its clients) may help StanChart support its net interest margins as the operating environment shifts and as lending picks up.
Standard Chartered continues to adopt an asset-light approach, with its Chiromo building designated as held for sale in June 2025 (having sold its Treasury Square and Nyeri branches last year).
Standard Chartered Bank continued investments in its digital strategy in line with its parent company’s global target to leverage artificial intelligence and automation to significantly reduce operational costs and increase efficiency.
Risks to the outlook, however, remain on account of the potential impact of ongoing geopolitical tensions and sustained margin compression.
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