Africa-Press – Kenya. Standard Chartered Bank Kenya has reported a 38.3 per cent drop in net profit for the year ended December 2025, on the back of increased expenses and lower operating income.
The lender yesterday said its profit after tax for the period was Sh12.4 billion down from Sh20.1 billion recorded in 2024.
An interim dividend of Sh8 was declared and paid in October 2025 thus bringing the total dividend for the year to Sh31 per ordinary share, with a record high dividend payout ratio of 95 per cent.
This comes as the bank incurred a one-off employee past service cost of Sh2.6 billion in relation to the recent pension case.
Even so, the board will be recommending to the shareholders the payment of a final dividend of Sh23 for every ordinary share of Sh5 at its forthcoming annual general meeting.
Managing director and CEO Kariuki Ngari said the payout demonstrates the lender’s commitment to “consistently deliver sustainable returns to shareholders.”
StanChart’s operating income decreased 17 per cent to Sh42.3 billion from Sh50.7 billion the previous year, drops in both interest and non-funded income.
Net interest income decreased 13 per cent to Sh28.9 billion, which the bank has pegged on margin compression on the back of declining interest rates in the market.
“The decline has partially been mitigated by lower cost of funds on customer deposits driven by deliberate actions to reduce expensive deposits and growth in interest income from government securities on account of volumes growth,” Ngari noted.
Non-interest income decreased 23 per cent to Sh13.4 billion from a decline in transactional volumes and margins in transaction services and markets. The decline has partially been offset by growth in wealth solutions.
Underlying expenses increased four per cent to Sh20.8 billion to fund business growth and digital capabilities.
“In addition, we incurred a one-off employee past service cost of Sh 2.6 billion in relation to the pension case,” Ngari said.
In September 2025, the Supreme Court of Kenya ended a 16-year legal battle by ordering StanChart to pay roughly Sh7 billion in pension arrears to 629 former employees.
The ruling confirmed that the bank underpaid staff during a 1999 pension scheme conversion, leading to a major financial hit, including a Sh2.5 billion charge in Q3 2025.
Ngari however yesterday said the bank’s balance sheet remains strong, highly liquid and well capitalised. Net loans and advances to customers increased two per cent to close at Sh154.3 billion.
“The increase is mainly in corporate finance and wealth solutions, negated by decline in transaction services, personal loans and mortgages. The quality of our customer assets continued to improve with our non-performing loan ratio improving by 200bps to close at 5.4 per cent,” he noted.
Non-performing assets reduced by 27 per cent to Sh8.8 billion.
Ngari who will be leaving the lender in April after 24-year has projected strong growth going forward, on the back of Kenya’s stable economy with low inflation, stable currency and lower interest rates.
“The transition to the revised Risk Based Credit Pricing Model coupled with the strong macroeconomic environment strengthens the conditions for clients’ access to financing to support business growth,” he noted.
The StanChart board in January announced the appointment of insider Birju Sanghrajka as MD to replace Ngari.
Sanghrajka has been the head of corporate and investment banking coverage, Kenya, and an executive director on the board since July 2021.
