Standard Chartered profits quadruple in 2016

Standard Chartered Bank reported profitability bouncing back in 2016 compared with 2015, as a big fall in loan loss provisions brought down total expenses.

The bank on Thursday published results showing a 295.9% rise in net profits to Shs112bn. It is a complete reversal from 2015 when net profit dropped by 75.3% to Shs28bn from Shs114.5bn the previous year.

Revenues for 2016 rose 16% to Shs486.7bn with interest on loans and advances growing by 7.8% to Shs261.1bn while interest from investment securities increased by 18.4% to Shs91.8bn.

Total expenses were down 5.7% compared to 2015, coming in at Shs357.2bn. The decline was driven by a 43.5% fall in provisions for bad and doubtful debts to Shs66.9bn versus Shs118.5bn in 2015. Pre-tax profits more than tripled to Shs129.5bn.

“During the year we made substantial changes in the business to address the underlying challenges that impacted our earnings in 2015,” Albert Saltson, the bank’s chief executive said in a statement. Some of the changes mentioned in the statement were improving cost efficiency and tightening risk controls.

In 2015 the bank’s exposure to the bad loans of some of its corporate clients saw provisions for bad and doubtful debts rising by 227.76% to Shs118.4bn from Shs36bn the previous year. The result was reduced profitability.

Nonperforming loans last year fell 1.6% to Shs112bn. Additionally, credit growth to the private sector was negative, with net loans and advances declining by 6.5% to Shs1,233bn. Large loan exposures also fell 52.6% to Shs249.9bn from Shs527.9bn in 2015.

Assets increased by 9.7% to Shs2,944.2bn, driven by a 74.5% growth in balances due from parent and group companies to 623.8bn and a 51.9% increase in investment securities to Shs657.6bn. Standard Chartered is Uganda’s second-largest bank by assets.

Liabilities rose 7% to Shs2,401.8bn with customer deposits increasing by 8% to Shs1,985bn.

The lender, whose sole shareholder is the London-listed Standard Chartered PLC, increased shareholder’s equity by 22.6% to Shs542.4bn in 2016.