Standard Chartered Bank Kenya : – Annual Report 2022

Annual Report 2022

The[[ bank for the new economy]]

Here for good

Strategic report

We are the bank for the new economy - of people and ideas, of technology and trade

We have built a strong foundation in the world's most dynamic markets, serving the people and businesses that drive growth. We are at the frontline of today's biggest challenges and are taking a stand on key issues such as climate change, economic participation and globalisation. Our collaborative approach to innovation and drive to be diverse and inclusive means we can do more, better and faster.

Our Purpose is to drive commerce and prosperity through our unique diversity, and our heritage and values are expressed in our brand promise, Here for good.

Stakeholders

Throughout this report, we use these icons to represent the different stakeholder groups for whom we create value.

Clients	Regulators and	Investors	Suppliers	Society	Employees	Read more on pages 26 to 38
	governments

About this report

Our Annual Report and Financial Statements for the year ended 31 December 2022 provides insights into our progress in realising our purpose; to drive commerce and prosperity through our unique diversity. It provides details on our business, our strategy, our risk management, our governance and our financial performance.

Sustainability reporting

We adopt an integrated approach to corporate reporting, embedding non-financial information throughout our Annual Report.

This report is prepared in accordance with the requirements of the Kenyan Companies Act 2015, guidelines issued by the Capital Markets Authority and the Central Bank of Kenya's Prudential Guidelines.

For more information please visit sc.com/ke

Contents

Strategic report

1. Who we are
2. Delivering our strategy
3. Five year summary of financial performance
4. Our business

1. Business model

1. Our strategy

1. Our stands

1. Client segments reviews

1. Product groups

1. Risk management

1. Stakeholders and responsibilities

1. Chairperson's statement

1. Chief Executive Officer's statement

1. Corporate Governance

1. Financial statements

@StanChart

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4	Standard Chartered Bank Kenya Limited - Annual Report 2022

Who we are

Our Valued behaviours

Never settle

Better together

Do the right thing

Standard Chartered Bank Kenya Limited ('the Company', 'the Bank' or 'Standard Chartered') is a leading international banking group and the largest international bank in Kenya. Established in 1911, Standard Chartered Bank Kenya Limited is one of the oldest banks servicing this market.

We are a bank like no other. Our unique footprint, diverse experience, capabilities and culture set us apart. They enable us to capitalise on opportunities for our business, our customers, and the communities we serve.

Guided by our Purpose - to drive commerce and prosperity through our unique diversity - we connect companies, institutions, and individuals, who are the engines of global growth to the world's fastest growing and most dynamic regions.

Together, we are developing new economies that can deliver sustained prosperity in the decades ahead. As our brand promise makes clear, we are here for good.

We're developing a future-ready workforce built on good conduct and our valued behaviours.

• Continuously improve and innovate
• Simplify
• Learn from your successes and failures

• See more in others

• "How can I help?"

• Build for the long term

• Live with integrity

• Think client

• Be brave, be the change

Strategic report

Cutting tape during the launch of the Village market sales and service centre.

Standard Chartered Bank Kenya Limited - Annual Report 2022

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Strategic report

Delivering our strategy

Our purpose and progress

Our Purpose is to drive commerce and prosperity through our unique diversity, and this guides our strategy and everything we do. The businesses we serve, and with which we connect and partner, are the engines of trade and innovation, and central to the transition to a fair, sustainable future.

In support of our Purpose, we continue to focus on three 'Stands', areas where we have long-term ambitions for positive business and societal impact - Accelerating Zero, Lifting Participation and Resetting Globalisation. These stands are fully consistent with our strategy, stretching our thinking, our action and our leadership to accelerate our growth.

We set out our strategy in early 2021, built on the four pillars of Network, Affluent, Mass Retail and Sustainability. Two years on, these themes and areas of focus are even more relevant; our strategy is working and will continue to drive future growth.

Financial KPIs

We measure our progress against Group key performance indicators (KPIs), a selection of which are below. Our Group KPIs include non-financial measures reflecting our commitment

to sustainable social and economic development across our business, operations and communities.

Operating income	Return on capital employed
KShs 33,093m	21.47%
17%	263bps
(2021: KShs 28,303m)	(2021: 18.84%)
Profit before tax	Total capital
KShs 17,103m	17.28%
36%	(48)bps
(2021: 17.76%)
(2021: KShs 12,598m)
Basic earnings per share	Tier 1 capital*
KShs 31.47	15.36%
798bps	(18)bps
(2021: KShs 23.49)	(2021: 15.54%)

• Tier 1 capital and total capital are computed as a percentage of the Company's risk weighted assets.

Non-financial measures

Diversity and inclusion: women in senior roles	Non branch transactions
47%	97%
(2021: 46%)	(2021: 96%)

2	Standard Chartered Bank Kenya Limited - Annual Report 2022

Five year summary of financial performance

	2022	2021	2020	2019	2018
Consolidated income statement	KShs '000	KShs '000	KShs '000	KShs '000	KShs '000
Operating income	33,092,934	28,302,502	26,688,964	27,949,636	27,776,028
Operating expenses	(15,074,919)	(14,192,783)	(15,686,497)	(15,542,350)	(14,580,278)
Impairment losses on financial instruments	(784,623)	(1,492,838)	(3,586,052)	(233,429)	(1,349,134)
Impairment losses on intangible assets	(130,193)	(18,828)	(20,357)	-	-
Profit before tax	17,103,199	12,598,053	7,396,058	12,173,857	11,846,616
Income tax expense	(5,045,264)	(3,554,214)	(1,955,641)	(3,937,084)	(3,747,423)
Profit after tax	12,057,935	9,043,839	5,440,417	8,236,773	8,099,193
Information per ordinary share
Basic earnings per share (KShs) (2019-2018	31.47
restated)	23.49	13.95	21.36	20.99
Dividend per share on each ordinary share	22.00
(KShs)	19.00	10.50	12.50	19.00
Consolidated statement of financial position
Loans and advances to customers (gross)	148,690,254	136,181,940	130,719,448	136,534,569	127,860,005
Impairment losses on loans and advances to	(9,277,694)
customers	(10,207,350)	(9,195,221)	(7,844,228)	(9,208,455)
Government securities	105,696,882	95,596,185	99,779,222	99,610,577	98,685,925
Other assets	136,150,573	113,301,163	104,301,621	73,838,138	68,066,548
Total assets	381,260,015	334,871,938	325,605,070	302,139,056	285,404,023
Deposits from customers	278,879,309	265,469,114	256,497,530	228,433,515	224,284,420
Other liabilities	46,243,976	16,188,718	18,217,502	25,945,014	14,480,215
Total liabilities	325,123,285	281,657,832	274,715,032	254,378,529	238,764,635
Net assets	56,136,730	53,214,106	50,890,038	47,760,527	46,639,388
Shareholders' funds	56,136,730	53,214,106	50,890,038	47,760,527	46,639,388
Ratios
Cost income ratio	46%	50%	59%	56%	52%
Return on capital employed	21%	19%	11%	19%	19%
Impairment charge/gross loans and advances	1%	1%	3%	0%	1%
Gross loans and advances to deposits ratio	53%	51%	51%	60%	57%
Gross non-performing loans and advances/total	9%
gross loans and advances	10%	15%	9%	11%
Core capital/total deposit liabilities	15%	15%	15%	16%	16%
Core capital/ total risk weighted assets	15%	16%	16%	15%	17%
Total capital/total risk weighted assets	17%	18%	18%	18%	20%

Strategic report

Standard Chartered Bank Kenya Limited - Annual Report 2022

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