StanChart Kenya Sees Prolonged Viral Pandemic as ‘Very Damaging’

NAIROBI (Capital Markets in Africa) – The coronavirus outbreak will hurt Kenyan business revenues if it lasts longer than 90 days as employees stay away from work and companies halt operations, according to Standard Chartered Bank Kenya Ltd.
“We are starting to engage with clients to see what is the impact,” Chief Executive Officer Kariuki Ngari said. “We believe it will get worse before it gets better. We are hopeful like everybody else that it will not become prolonged. If it is prolonged more than 60 to 90 days it will be very damaging.”
Before the global pandemic, the bank looked forward to strong lending and income growth as various industries were showing signs of expansion and after the government settled delayed payments to companies, he said Thursday in an interview in the Kenyan capital, Nairobi.
That’s no longer the case and the lender now expects to increase credit limits for clients and to offer moratoriums or restructure payments on a case-by-case basis, Ngari said.
Standard Chartered will boost its investment in financial technology as it introduces more products and cuts paper-based processes, the CEO said. Investment in technology increased to 15% of total costs last year from less than 5% three years ago, he said.
“For the retail space, the investment is mainly around the mobile platform,” he said. “On the corporate space, it’s on what we call Straight to Bank, that’s the platform that our corporate clients use, and also on linking between our systems and the clients’ offices.”
Last year 85% of all transactions were on non-branch channels. Commercial banking contributed 9% of revenue, 30% came from corporate and institutional banking, while retail banking brought 45%.
The lender reported little growth in full-year profit for 2019, when net income rose 1.7% to 8.24 billion shillings ($78.8 million).