Interim dividend jumps to KSh 3.80 per share. Despite a 14.2% decline in pre-tax earnings, Stanbic doubled its shareholder payout.
Stanbic Bank Kenya’s H1 2025 net profit dips 9.3% as costs surge—but interim dividend more than doubles to KSh 3.80 per share.
Shareholders
Stanbic Bank Kenya has reported a 9.3% drop in earnings per share for the six months ending June 2025, falling to KSh 16.56 from KSh 18.26 in H1 2024—driven by surging costs despite growth in interest and non-interest income.
Yet in a surprising move, the bank more than doubled its interim dividend to KSh 3.80 per share, up from KSh 1.84 last year, signaling confidence in long-term fundamentals despite short-term headwinds.
“We remain optimistic about the macroeconomic environment and committed to delivering value to our shareholders,” said Stanbic Bank Kenya CEO Joshua Oigara, during the investor briefing on August 7, 2025.
Key Numbers – H1 2025 Performance
Metric
H1 2025
H1 2024
% Change
Profit After Tax
KSh 6.54B
KSh 7.21B
↓ 9.3%
Net Interest Income
KSh 11.83B
KSh 12.56B
↓ 5.8%
Non-Interest Income
KSh 7.62B
KSh 7.56B
↑ 0.8%
Operating Expenses
KSh 9.39B
KSh 8.13B
↑ 15.5%
Cost-to-Income Ratio
48.3%
40.4%
Worsened
Profit Before Tax
KSh 8.61B
KSh 10.03B
↓ 14.2%
Why Did Profit Fall?
The drag on performance was largely due to a 15.5% jump in operating expenses, which pushed the cost-to-income ratio to 48.3%, up sharply from 40.4% a year earlier. The bank cited rising inflation, increased compliance costs, and tech investments as major contributors.
“Strategic investments in digital platforms, cybersecurity, and risk management are essential, but they’ve temporarily pressured our cost base,” explained CFO Paul Njuguna.
Interest Income Grows—but Margins Tighten
Total interest income increased on the back of higher lending volumes, especially to SMEs and retail customers. However, the net interest income declined 5.8% to KSh 11.83 billion, indicating margin compression due to increased cost of funds in a tightening monetary environment.
This is consistent with the Central Bank of Kenya (CBK)’s monetary policy stance, which has kept the benchmark rate at a relatively high 13.0% to tame inflation—raising funding costs for banks.
Non-Interest Income Holds Firm
Fee-based revenue rose marginally by 0.8% to KSh 7.62 billion, supported by strong performance in foreign exchange trading, digital transaction fees, and wealth management products. Stanbic continues to push its non-funded income strategy amid interest rate volatility.
Dividend Surge: A Confidence Signal?
Despite profit pressures, the board’s move to increase the interim dividend by 106.5%—from KSh 1.84 to KSh 3.80 per share—has been interpreted by analysts as a vote of confidence in the bank’s balance sheet strength.
“This is an assertive statement that Stanbic is financially solid, well-capitalized, and focused on long-term growth,” said financial analyst Rita Wanjiku of Faida Investment Bank.
Outlook: What to Expect
Continued investment in tech and compliance will keep OPEX high through H2 2025.
Loan book growth is expected to slow slightly as interest rates remain elevated.
Dividend policy could remain aggressive if capital adequacy stays strong.
Final Word
While Stanbic Bank Kenya’s H1 2025 results reflect short-term profitability pressures, the bold dividend raise, continued digital investments, and solid non-interest income performance show a bank positioning for long-term resilience.
As Oigara aptly put it:
“We are transforming to serve the evolving needs of our clients—profitability will follow purpose.”