Stanbic Bank Kenya posts stellar earnings

Stanbic Bank Kenya shareholders are in for a rewarding year as the lender declared a payout of Sh4.98 billion, following a remarkable 26% increase in net profits for the financial year 2022, reaching Sh9.1 billion. CNBC Africa had the opportunity to speak with Joshua Oigara, CEO of Stanbic Bank Kenya, who shared insights into the bank's success and future prospects. Oigara highlighted the bank's achievements, including a 27% growth in customer loans to Sh2.36 billion, a 12% increase in customer deposits, and a 15.3% rise in return on equity. The bank also declared a dividend of Sh12.6 shillings, signaling a positive trajectory moving forward. Oigara expressed confidence in maintaining the momentum in the upcoming year. Looking ahead to 2023, Oigara outlined the bank's focus areas, emphasizing continued growth in large customer franchises, SMEs, business and commercial clients, as well as retail banking and high net worth individuals. He identified key sectors for growth such as infrastructure, energy, education, and agriculture, highlighting the bank's commitment to driving progress and seizing opportunities in the market. Despite regional challenges such as rising commodity prices, inflation, currency depreciation, and youth unemployment, Oigara remains optimistic about the bank's growth prospects. He underscored the importance of technology, risk management, and cost efficiency in driving sustainable growth. With the World Bank projecting a 5.1-5.2% economic growth for 2023, Oigara sees significant opportunities for the banking sector to capitalize on the positive economic outlook. Oigara emphasized the importance of technology in banking operations, stressing the need for innovation, customer experience enhancement, and efficiency improvements. He highlighted the bank's focus on green financing as part of its commitment to sustainability, with investments in renewable energy, commercial buildings, and agriculture. Despite challenges in the South Sudan market, Oigara reassured stakeholders of the bank's strong relationship with regulatory authorities and commitment to driving economic development in the region. He pointed out key growth drivers in South Sudan, including energy, oil and gas, home loans, SME financing, and regional trade facilitation. Oigara also addressed the growing trend of digital lending, highlighting its role in enhancing financial inclusion and competition in the banking sector. He acknowledged the importance of regulatory oversight to ensure consumer protection and financial stability. On the issue of non-performing loans, Oigara highlighted the bank's NPL ratio of 9.1%, below the industry average of 14%. He outlined the bank's risk management strategies and expressed the ambition to further reduce the ratio to 7-8% in 2023. Overall, Oigara's insights paint a positive picture for Stanbic Bank Kenya, positioning the bank for continued success and growth in the year ahead.