Genghis Capital - Standard Chartered Bank Kenya Ltd (SCBK) Standard Chartered Bank of Kenya Plc (NSE: SCBK) 3Q18 Earnings Note

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Genghis Capital

Gerald Muriuki

EUR 26.02 For Business Accounts Only

Standard Chartered Bank of Kenya Plc (NSE: SCBK) 3Q18 Earnings Note

Standard Chartered Bank of Kenya Plc (NSE: SCBK) announced a 33.9% y/y growth in 3Q18 Profit after Tax. PAT growth was supported by a 5.9% y/y growth in Net Interest Income (NII) and a 9.7% y/y growth in Non-Interest Revenue (NIR). The bank continues its risk-off approach with the customer loan book contracting 2.8% y/y while government securities fell 6.1% y/y. The risk-off strategy enabled the bank to maintain a very liquid balance sheet, at a sector leading liquidity level of 69.4%. A major challenge has been Non-performing loans (NPLs) formation, with the bank's NPL ratio at 15.6%, lies above its historical average of 12.8% and the 12.0% sector NPL ratio levels.

Against a target price of KES 196.76, we maintain a HOLD recommendation on SCBK. This represents an upside potential of 4.7% from the current market price of KES 188.

26/11/2018 4 EN

Underlying

Standard Chartered Bank Kenya Ltd

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KE0000000448 Nairobi Securities Exchange Kenya

Provider

Genghis Capital

Genghis Capital is an innovative and customer focused Investment Bank licensed by the Capital Markets Authority (CMA). Founded in 2008, Genghis is one of the leading investment banks in Kenya. Since its establishment, Genghis has achieved tremendous growth to offer a well-diversified portfolio of financial services that includes:

i. Securities(Equity/Debt) Trading
ii. Research
iii. Wealth Management services
iv. Investment Advisory & Management via the GenCap Unit Trusts
v. Corporate Finance & Transaction Advisory services

The Kenyan Capital Markets continue to develop in size, scope and sophistication. With this is an increasing demand for more specialized and personalized brokerage service and we at Genghis Capital are glad to be able to offer you this service. Our strength lies in ensuring our clients are up to speed with developments at the stock market and the economy. Research and technology remains our competitive and comparative advantage hence Experience, Expertise and Professionalism are some of the qualities you can expect from our team.

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Analysts

Gerald Muriuki

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Standard Chartered Bank of Kenya Plc (NSE: SCBK) 3Q18 Earnings Note

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