As the second wave of Covid-19 continues to hit the country, and with businesses striving to remain afloat, the Standard Chartered Bank has become the first lender to issue a profit warning for the financial year ending December 31, 2020.
The lender is expected to release the full-year financial results during the first quarter of 2021 and says the forecast in the drop in profits has been influenced by economic challenges experienced in the country owing to the outbreak of the Covid-19 pandemic.
“It has been a challenging year with the protracted health pandemic and economic crisis and against this backdrop, SCBK’s current performance forecast indicates a substantial decline in the profit after tax for the year ending 31 December 2020 compared to the prior year, ” said the bank in a statement.
The bank, however, says it expects the year 2021 to be greater than 2020. It says it anticipates that clients’ demand will increase over the course of 2021 as the Kenyan and global economies open as it hopes that the new Covid-19 vaccine will renew hope in investments.
“With the recent announcements of COVID-19 vaccines, global business sentiment has improved,” reads the firm statement adding that it is committed to ensuring that customers and shareholders have everything they need no matter the circumstance.
In 2019, Standard Chartered Bank Kenya posted a pre-tax profit of 12.2 billion shillings at a time when the bank recorded increased use of digital services. Most of its services are now accessed via mobile including loans and deposits.
The bank also saw an increase in its loan and advances to customers since December 31 2018 which increased 8 percent to 129 billion shillings while the gross non-performing loans reduced 7 percent year-on-year. The bank’s Operating expenses increased by 8 percent due to increased investments in technology.
Analysts say many commercial banks in Kenya are likely to issue profit warnings given the impact of the pandemic. More Articles From This Author