Standard Chartered Bank Kenya has reported a sharp decline in loan impairment losses in the first half of 2026, pointing to an improvement in the quality of its loan book as the lender navigates a challenging interest-rate environment.
The bank’s loan impairment losses fell by 57 per cent to Sh508 million in the six months to June, from Sh1.18 billion recorded in the same period last year.
At the same time, the bank’s non-performing loan (NPL) ratio improved by 40 basis points to five per cent, indicating a reduction in the proportion of its loans classified as non-performing.
The improvement in asset quality helped cushion the impact of weaker interest income, which remains a major source of revenue for banks.
This saw the lender post a Sh6.7 billion profit, a drop from the Sh8.1 billion posted last year.
“The Bank delivered a profit before tax of Sh9.6 billion. Our capital remains strong and the directors are pleased to announce an interim dividend of Sh8.50 for every ordinary share of Sh5.00 to be paid to shareholders on the register at the close of business on 10 September 2026,” said Managing Director and Chief Executive Officer, Birju Sanghrajka.
Standard Chartered’s net interest income declined by 20 per cent year-on-year to Sh12.3 billion, with the lender attributing the decline to rate and margin pressures despite growth in lending volumes.
The bank’s total operating income consequently fell nine per cent to Sh20.1 billion, from Sh22.1 billion a year earlier.
Despite the weaker revenue performance, operating expenses remained broadly stable at Sh10 billion, reflecting continued cost management and efficiency measures.
The improvement in loan quality was also reflected in the growth of the bank’s lending business. Net loans and advances to customers increased by 10 per cent from December 2025 to Sh169.2 billion by June 2026.
The growth was driven by increased activity in transaction banking and wealth solutions, according to the bank.
Customer deposits also increased by nine per cent to Sh309.1 billion, with corporate deposits driving the growth. Current and savings accounts accounted for 95 per cent of total customer deposits, pointing to a strong base of relatively stable funding.
The bank maintained a strong liquidity position, with its liquidity ratio standing at 67.3 per cent, well above the 20 per cent regulatory minimum.
Its total capital ratio stood at 18.2 per cent, also above the regulatory minimum of 14.5 per cent.
However, the improvement in asset quality did not prevent a decline in overall profitability.
Profit before tax fell 12 per cent to Sh9.6 billion, while profit after tax dropped 17 per cent to Sh6.7 billion from Sh8.1 billion in the first half of 2025.
The decline came as the 20 per cent fall in net interest income outweighed a 16 per cent increase in non-interest income, which rose to Sh7.9 billion on stronger performance in wealth solutions and higher foreign exchange transaction volumes.
The results highlight the mixed performance facing banks, with improving loan quality and lower credit losses providing a buffer against pressure on lending margins and interest income.
Standard Chartered said the Kenyan economic environment remains stable, supported by low inflation, a stable currency and lower interest rates, while warning of uncertainty in the global macroeconomic environment.
