Standard Chartered Bank Kenya Ltd. has reduced the volume of its financial injections in government securities of this East African country by 52% during the period when investment activity allows for significant profits.
This decision of the mentioned financial institution came as a surprise. The lender even faced a trading loss of 2.3 billion shillings ($15 million). The relevant information is contained in a note from Sterling Capital to clients, published after the financial institution promulgated an income statement for the first nine months of this year.
Experts say that the decision of Standard Chartered Bank Kenya Ltd. is a sign that the parent company, having fixed the implementation of sovereign risks in the material plane in countries such as Ghana, is realizing a corporate policy to reduce the likelihood of negative scenarios in other states in case of a repeat of the said situations.
Currently, there is a growth of vulnerability to defaults in African countries. The increase in the probability of risk materialization is because due to a lack of financial resources, these states do not have the opportunity to enter global markets. Data from the International Monetary Fund indicate that about eight African economies need debt restructuring. Ghana and Zambia have applied for emergency financial assistance. Also, these countries have officially declared the need for debt restructuring. Investors are showing increased caution about the prospects of interaction with African States that have large debts.
Equity Group Holdings Ltd. at the same time increased its holdings of government securities in Kenya. Three-month Treasury bills of this country were sold for 15.4% at the last auction. This indicator of profit is the highest in about eight years.
Standard Chartered tripled its provisions for possible loan losses in the nine months to September. Lending income increased by 35%, while non-interest income fell by almost 7%. The share price of a financial institution in Nairobi is currently fixed at the highest level in the last 16 years.
As we have reported earlier, Standard Chartered Partners Ant Group to Promote Sustainability Goals.