Nairobi Securities Exchange stock:
Shares in Standard Chartered Bank Ltd (NSE:SCBK) gained 3.08% on Wednesday (May, 25, 2016), but on a tiny volume of 1,100 shares against the stock’s daily average of 22,466 shares. The shares closed the day at Sh201 after earlier rallying to an intraday high of Sh202. StanChart shares have moved back and forth in the range of Sh183 to Sh334 over the last 52-weeks.
The bank company has more than 309 million shares outstanding.
StanChart (NSE:SCBK) posted 1Q2016 net income of Sh2.6 billion, up 44.4% over a corresponding quarter in 2015. The management explained that the increase in net income for 1Q was supported by the actions the bank took in 2015 to try and improve its income trends.
Among the major Kenyan banks that have reported their 1Q, StanChart’s 44.4% jump in net income is the highest and if you listen carefully to the management, that should be the trend going forward.
Robust loan business
Looking closely at StanChart (NSE:SCBK)’s financial results for 1Q, you can see that the company’s loans business isn’t bad at all. The bank reported that its interest income in 1Q rose to Sh6.4 billion from Sh5.4 billion in the like quarter a year ago. In the recent months, StanChart has tried to be more disciplined in its loan business to reduce its exposure to bad creditors.
Excitment of crude price recovery
It is worth noting that bank stocks globally are witnessing increasing investor appetite amid recovery in crude oil prices. Oil prices have been doused in the recent years amid a global supply glut. But OPEC members are expected to meet next month (June 2016) to discuss possible cut in oil production to help lift prices of the commodity. An earlier attempt by some OPEC members to cut oil output failed after Saudi Arabia refused to commit to product freeze unless Iran was also doing it.
Of note in this case is that StanChart (NSE:SCBK)’s management hasn’t said how they expect the rising oil prices to play out for the company given that as an importer of oil, Kenya benefits from lower prices of the commodity.
Nairobi Securities Exchange stock:
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