SCB’s interest expense lines widened significantly signaling costly deposits booked in the period as ‘fees and commissions’ leaned weighing the non interest revenue line. The latter being a probable autopsy of the infamous unwarranted fee directive by the central bank
After a stellar FY18, Standard Chartered Chief Executive Officer – Herman Kasekende faces an uphill earnings battle to regain market leadership after rising interest expenses, a flat trading income and a leaning fee and commission lines weighed the London incorporated lender. Standard Chartered Bank Zambia’s (SCBs) first quarter profits slid 33.58% to K69.49 million compared with K104.62 million same period a year ago. This was revealed in the first quarter financial statement published in the local press.
Interest expenses ballooned 83.21% to K72.78 million reflecting cost of funding for the bank whose interest paid on deposits widened 62.665 to K68.62 million. This income expense rise seems to suggest a rising cost of funding, signs of liquidity as such the bank could be aiming to deposits through paying more on depo’s, BT said in its note on behind the markets section.
Non interest expenses grew 9.07% weighed by a 7% uptick in operational costs to K156.49 million (from K145.40 million in the first quarter of 2018).
The lenders total income narrowed by a 12.96% margin to K271.87 million (from K312.37 million) weighed by a 41.91% dip in non interest revenues to K83.16 million (from K143.16 million). This was then cushioned by an 11.19% rise in interest income to K245.84 million (from K221.32 million).
Autopsy effects of the unwarranted fee directive by the central bank did not spare the London incorporated lender whose fee and income lines thinned 16.1% to K35.44 million as its trading incomes flattened to K42.46 million.
Standard Chartered earnings rank third as the lender rallies behind Stanbic and Barclays as at end of first quarter of 2019.
