LUSAKA (The Business Telegraph) – Lusaka Securities Exchange – LuSE listed Standard Chartered Bank’s half year earnings came under immense pressure from rising sovereign risk adjusted impairments and rising margin squeeze related drivers. Stancharts 1H20 after tax earnings slid deeper into loss zone to K225.5mln from a profit of K123.0mln a year earlier same time. On a quarterly basis 2Q20 after tax earnings narrowed 78.7% to K39.7mln (loss).
Stanchart’s credit impairments cumulatively widened to K145.8mln of which K58.8mln was passed in the second quarter while the bank has suffered a decline in earning performance across all income lines. Non interest income contracted by 27.9% to K132.1mln weighed by a 30.2% constriction in fee and commission income while foreign exchange trading revenues were down 11%. This downward performance was partially offset by a 28.2% rise in interest income to K656.9mln propelled by a 56.5% growth in duration income and a 7.5% uptick in advances earnings which in part were slowed by margin squeeze from a 2.25% benchmark interest rate downward adjustment earlier in May.
Stancharts non interest expense line was up 87.3% from a year ago to K633.3mln while interest expense as a reflection of its cost of funding climbed 28.7% higher to K199.4mln. Cost to income ratio ballooned to 107%.
Standard Chartered Bank Zambia Plc announced earlier that it will be closing (2) of its branches namely Solwezi and Mazabuka whose traffic will be serviced online instead as the bank goes digital. In addition, the bank restructured some of its business units earlier in the year. The bank is in the process of leveraging on its digital investment for a leaner model.
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