Standard Chartered Bank Kenya, one of the country’s biggest foreign-owned lenders, is bracing for a tougher second half of the year, after it warned of a sharp drop in earnings following a costly pension settlement order.
The bank said on Tuesday that its net profit for 2025 could fall by at least 25%, translating into a minimum $38.6 million (Sh5 billion) cut in earnings. StanChart posted $155 million (Sh20.06 billion) in net profit in 2024, meaning that full-year profit is likely capped at $116.3 million (Sh15.05 billion).
“This projection is primarily due to the judgment of the Retirement Benefits Appeals Tribunal Appeal No. 8 of 2021 dated April 28, 2022, and the directions in respect of the computations to be paid out to the appellants issued by the Tribunal on May 22, 2025,” the lender said in its report.
The warning follows a 21% drop in the bank’s net earnings for the first half of 2025, the steepest decline among its eight peers and a sign of mounting pressure.
Pension payout blows hole in earnings
The lender is preparing to settle a claim worth up to $54.1 million (Sh7 billion), following the conclusion of a long-running legal battle with 629 former employees. The dispute dates back to 1999, when StanChart converted its pension scheme from a defined benefit to a defined contribution plan.
Ex-workers argued that their dues were undervalued, and after years of litigation, the Supreme Court on September 5, 2025, upheld earlier rulings in favour of the retirees.
StanChart has confirmed it will begin paying eligible claimants from September 22, with verification taking place at Almary Green Business Park in Nairobi. Beneficiaries or their successors will be required to present supporting documents, including pension statements.
The lender, however, said the final bill may come in below the $54.1 million estimate, stressing it has “adequate financial buffers to cover the liability.”
First-half profit slump adds pressure
Net profit for the period fell 21% driven by lower income from both lending and non-interest streams.
Non-interest income slid to $52.4 million (Sh6.78 billion), dragged down by a 59.5% plunge in forex trading income to $15.4 million (Sh1.99 billion).
The payout threatens to reverse a growth streak that had seen StanChart expand profit after tax nearly four-fold in five years, from $42 million (Sh5.44 billion) in 2020 to $154.9 million (Sh20.06 billion) in 2024.The lender also doubled its operating income to $388.4 million (Sh50.27 billion) during the same period.
While the bank insists its capital position remains strong, the combination of a $54.1 million pension settlement and softer operating income sets the stage for a difficult rest-of-the-year.
Note: Local currency figures were converted to US dollars using the exchange rate of KSh129.3/$1 as of September 18, 2025.
