Stanbic Bank Kenya reports 53% growth in net interest income in Q3’24

Stanbic Bank Kenya has demonstrated a remarkable 53 per cent increase in net interest income for the third quarter of 2024, reaching Ksh28.98 billion. This growth has been primarily attributed to robust lending and investment performance. To delve into the bank's strategy and the broader implications for Kenya's financial sector, CNBC Africa interviewed Dennis Musau, Chief Finance & Value Officer at Stanbic Bank Kenya. Over the course of the interview, Musau shed light on the key factors driving the bank's performance and outlined their plans for growth and risk management moving forward. One of the primary drivers behind the exceptional net interest income growth was the market environment rife with high interest rates and increased funding costs. Despite the challenges posed by subdued economic activity, characterized by a significant drop in private sector credit lending, Musau remains optimistic as rates show signs of decline and stability in FX markets. Non-performing loans remain a concern for the industry, with the stock hovering around 16.7 to 17 per cent. Stanbic Bank Kenya, however, has managed to keep its NPL ratio at 10.3 per cent, with aspirations to operate in single digits. The contraction of the loan book by 13 per cent year-on-year has impacted the bank's figures, highlighting the need for private sector credit growth to revive. Leveraging their core capital strength, Stanbic Bank Kenya plans to support organic and inorganic growth, meet evolving regulatory requirements, and absorb potential risks. The institution's surplus capital may also be distributed to shareholders, following necessary audit procedures. The bank's FX trading activities have significantly contributed to their income, with plans to continue expanding in this area while managing currency risk and market volatility. Looking ahead, Stanbic Bank Kenya intends to enhance their capabilities in private, business, and corporate banking, technology provision, customer service channels, and geographical footprint. The bank remains open to organic growth, acquisitions, and strategic partnerships to further its market presence and offerings. The interview concluded with optimism for Stanbic Bank Kenya's future prospects and anticipation for the next quarter's performance.