Home
Companies
Enterprise
Boss Talk

Personal details
Change password
Purchases
Sign out

Home
News
Business
Opinion
Science & Health
Magazine
- Commodities
- Market News
Sports
- Commodities
- Market News
Rest of Africa
- Commodities
- Market News
Kusi Ideas
- Commodities
- Market News
Podcasts
Videos
Sponsored

Services
- Our Brands

Stanchart CEO Kariuki Ngari on banking the affluent

Thursday, March 14, 2024 — updated on August 22, 2024 - 4 min read

Standard Chartered Bank Kenya Chief Executive Officer Kariuki Ngari. ILLUSTRATION | JOSEPH BARASA | NMG

By Patrick Alushula

Business Reporter

Nation Media Group

Thank you for reading businessdailyafrica.com

Standard Chartered Bank Kenya raised its dividend payout by 32 percent to a record Sh29 per share as net profit for the financial year ended December 2023 grew 15 percent to Sh13.8 billion.

The lender’s chief executive Kariuki Ngari spoke to the Business Daily about what drove the growth, what it takes to stick to one’s playbook even during a season of turbulence and what banking the affluent looks like.

You have increased dividends by 32 percent as profits grew. What worked for you in the year loan defaults were mounting?

Related

Companies

StanChart raises dividend as net profit hits Sh13.8bn

Mar 12, 2024 - 1 min read
Capital Markets

Bank share prices up as investors eye higher dividends

Mar 14, 2024 - 4 min read

For us, it was about focusing on ourselves. It was about having a clear strategy, sticking to it and ensuring there is no distraction even when it got rough at times.

We focused on the four strategic pillars, including network, affluent, mass retail and sustainability and looking at the opportunities in each of these pillars. There were clients that were expanding even in the tough economic environment and it was about working with them to seize the opportunities they were seeing.

You are going to distribute nearly 80 percent of the profit as dividends. What has influenced such a generous payout? How does your dividend policy look like?

We do have a capital risk appetite that is calibrated to allow us to retain enough to support our growth and any excess, we give it back to the shareholders. For us, we don’t target to distribute a certain percentage of earnings. What we work with is our capital risk appetite which takes into account the minimum capital we require.

One of the sticky issues for the better part of 2023 was a pile-up in loan defaults yet your stock of gross non-performing loans (NPLs) declined 31 percent to Sh17.22 billion. How did you achieve this?

Your risk appetite determines the quality of your loan book. We do have processes to manage emerging issues so that they do not become NPLs and it includes supporting our clients.

We had a closure of historical NPLs we had with our clients. The reduction was about Sh7.5 billion. It was about being flexible and listening to the proposals being made by the customers. It is about sitting down and saying “How can we work this out?” That helped.

StanChart is big on affluent banking. Which trends are you noticing in this group of customers in light of the prevailing economic situation?

Alternative investments. That is big. We want to be able to give these clients options. Back in time, the only option was fixed deposits and we used to spend a long time discussing the rate of return. But having an alternative is very important for our clients.

We now have 180 funds. In the affluent, we see the search for alternatives coming out strongly. That we can give them options is one of the key drivers. As clients continue to understand these products and search for opportunities outside Kenya, we continue to strengthen our digital platforms to deliver this.

Late last year, you announced a Sh4 million minimum account balance for priority banking and also Sh10 million minimum monthly cash flow for SMEs accounts. What were you trying to achieve here? One would have imagined that in a tough economic environment the logical thing would have been to relax the terms.

Intuitively, that is what you think should have happened but it is important to stick to our strategy. For affluent, it (the terms) was nothing new. It was just re-emphasising that ‘this is what the package gives you.’

When you are in priority banking, you have a dedicated relationship manager and a dedicated relationship team you can call 24 hours a day and that is a cost to the bank. So, if you are not maintaining the standards, it is unsustainable. Some people, over time, forget and withdraw the money then it becomes a big cost for us.

For business banking, it is the same. You realise that over time, some clients in your portfolio have stopped doing business with you or moved elsewhere and are therefore doing little with you.

That was about ensuring people and businesses are at the right threshold and we are serving them the way we should.

StanChart staff numbers have been dropping, yet staff costs keep rising. Why the mismatch?

We are paying salaries and there is inflation. At any given time you are adjusting for inflation. If you look at Kenya in the last couple of years, you have seen how inflation numbers have been and so you have to keep adjusting to pay competitive salaries. We believe we pay competitive salaries.

You have to factor in that, yes, you have fewer staff but payment per staff is higher. When you look at our business structure, it is relationship-led and so you need the right calibre of relationship managers.

→ [email protected]

Login to join the discussion

Don't have an account? Register

Get it First!

Get Breaking News Delivered to your Inbox.

Conflict

Companies

Telkom billions trail fades on multi-country barriers

Sep 19, 2024 - 5 min read
Columnists

Inside the investors’ safety nets in Kenya’s new privatisation plan

Mar 18, 2024 - 3 min read
Companies

Cytonn fails to secure more time for funds compliance

Mar 18, 2024 - 4 min read
Columnists

Essentials for sustained economic growth in Kenya

Mar 18, 2024 - 4 min read

Latest

Meta

Frequently Asked Questions

Sep 25, 2024 - 4 min read
Meta

Cookie Policy

Sep 24, 2024 - 5 min read
Meta

Terms and Conditions

Sep 24, 2024 - 15 min read
Companies

Telkom billions trail fades on multi-country barriers

Sep 19, 2024 - 5 min read

In the headlines

Companies

US think-tank taps Kenya's outgoing UN envoy

Mar 19, 2024 - 3 min read
Meta

Frequently Asked Questions

Sep 25, 2024 - 4 min read
Meta

Cookie Policy

Sep 24, 2024 - 5 min read
Meta

Terms and Conditions

Sep 24, 2024 - 15 min read

Oops

We're sorry, we couldn't load the article

If you have an Ad-blocker please disable it and reload the page or try again later.

Follow us

Apps

Support

Contact Us
Frequently Asked Questions

Tools

This Week's ePaper
News Feed
Events

Legal & Privacy

Terms and Conditions
Privacy Policy
Cookie Policy
Our Blog Rules

Nation Africa
The Citizen
Nairobi News
Mwananchi
NTV Kenya
Mwanaspoti
NTV Uganda
Business Daily
Daily Monitor
Nation Media Group

Nation Media Group © 2026