UK-based banking group, Standard Chartered, has for the first time since it began operating in Kenya crossed the Sh10 billion ($108 million) net profit mark. It reportedly employed a number of cost-cutting measures to achieve this landmark result.
The bank said aside from cost effective strategies like shrinking its loan books by Sh7 billion, it also sold a few of its properties to maintain its position as the country’s third most profitable bank.
It recorded a net profit of Sh10.4 billion ($109 million) for the first time since 1910, when it obtained an operating licence from Kenya’s Central Bank, in 2014. This represents a 23 percent increase from 2013’s Sh9.2 billion profit. “Cost efficiency will continue to be a key strength for the bank as it employs prudent cost management strategies helping it to maintain one of the lowest cost to income ratios in the industry” analysts at Dyer and Blair Investments told the Business Daily.
Kenya’s banking space is highly competitive, with over 34 lenders jostling for less than 40 million customers. This encourages a higher degree of personnel poaching, compared to other top African markets, as banks seek to gain the upper hand against fellow market players. Banks are therefore forced to stay on top of their game when managing the welfare of employees.
This was reflected in StanChart’s inflated salary bill for 2014. The bank’s staff cost rose 14 percent to Sh5.6 billion. Its management credited the rise to an increase in detected poaching of its staff.