Standard Chartered Bank Kenya (SCBK) has warned investors that its 2025 earnings will be impacted as it moves to settle a Sh7 billion pension obligation for former employees.
In a statement, the Tier 1 lender projected that its net earnings for the year ending December 31, 2025, would be at least 25 percent lower than those recorded in 2024.
The announcement saw the bank’s share price at the Nairobi Securities Exchange (NSE) tumble, shedding close to Sh15 compared to Monday trading and nearly Sh60 lower compared to its 52-week high of Sh347.50, set on Aug 19, 2025.
Standard Chartered began the year with a share price of Sh279.75 and has since gained 9.47 per cent on that price valuation, ranking it 49th on the NSE in terms of year-to-date performance.
The Tuesday warning means that the lender’s profits will drop by Sh7.1 billion or more, compared to the Sh28.5 billion reported in 2024, a figure almost similar to what it is awarding former employees in pension compensation.
Capital Markets Authority regulations demand that any listed company must issue a caution if its profits are projected to fall by 25 per cent.
On Friday, the lender announced that it had started processing payments for 629 pensioners, following the Supreme Court’s decision to uphold a claim on the lender’s pension fund.
“We would like to reassure our clients and stakeholders that SCBK is adequately capitalised to meet the anticipated obligations,” said Board chairperson Kellen Kariuki.
“We continue to execute our strategy of combining differentiated cross-border capabilities with leading wealth management expertise underpinned by sustainability.”
On Tuesday, market analysts asked investors to take caution due to relatively weak performance in the first six months of the year and the unfavorable court ruling, having lost nine per cent of its value in the past four weeks.
The lender recorded a 21 per cent decline in after-tax profit to Sh8.1 billion in the first six months ended June 30, 2025, down from Sh10.2 billion in the same period last year.
The bank’s asset base also marginally contracted 1.4 per cent to Sh372.1 billion year-on-year. However, total equity edged up 2.3 per cent to Sh65.6 billion from Sh64.1 billion, underpinned by growth in retained earnings, capital grants, and fair value.
The profit warning news is coming just five days after the bank officially closed the shareholders’ book ahead of dividend payout on October 7.
Last month, the bank announced the payment of an interim dividend of Sh8 for every ordinary share of Sh5.
The forecasted low revenue is also expected to take a toll on shareholders’ earnings at the end of the financial year, after enjoying one of the highest dividends in 2024.
Last year, investors took home a final dividend of Sh45 per share, up from Sh29 in 2023, after the lender posted a 45 per cent growth in net earnings for the year ended December 31, 2024.
The financial statement presented to investors in Nairobi in March indicated that the bank paid a record dividend of Sh13.9 billion after its full-year profit rose to Sh20.1 billion compared to Sh13.8 billion in the previous year.
by VICTOR AMADALA
