Stanbic Bank has doubled its interim dividend payout to shareholders for the first half of 2025, even as its net profit declined by 9.3 percent to Sh6.5 billion.

The bank will pay Sh3.80 per share for the six months to June, translating to a total payout of Sh1.5 billion, up from Sh726.8 million in the same period last year.

The lender said the decision was aimed at deploying idle capital and boosting returns, noting it had built up a strong capital base that allowed it to reward investors more.

“The more capital we hold, the more it is a drag on our earnings and profitability. We have a minimum capital threshold which we have set for ourselves in line with Central Bank. In addition to that, we have another 200 basis points buffer and that gives us enough capital,” Stanbic Kenya and South Sudan CEO Joshua Oigara said on Thursday.

“Anything beyond that is really nice to have but not a must. So, we are also being very efficient about how we are handling our capital,” he added.

Stanbic’s core capital to total risk-weighted assets rose to 15.2 percent from 13.5 percent, well above the statutory requirement of 10.5 percent. The ratio is a key measure of a bank’s strength and its ability to safeguard depositors and shareholders from financial shocks.

Despite the bigger dividend, the bank’s total income fell by 3.6 percent to Sh19.1 billion. The biggest hit came from foreign exchange trading, where income dropped by 58.2 percent to Sh1.9 billion due to a relatively stable shilling.

The local currency remained steady at about 129 units to the US dollar, limiting the high-margin opportunities seen in 2023 and early 2024.

“The environment has dramatically shifted in the foreign exchange market. The entry point from margins is gone and the industry must now move from the spreads game. What we are building now is a volumes business because now we are in a low margins environment and what we must do is push market share. We have increased our volumes in the foreign exchange business this half year by 25.0 percent and that’s one thing we are doing extremely well,” Oigara said.

The bank also cut its reliance on fixed deposits to reduce interest expenses. Interest paid on customer deposits fell by 45.3 percent to Sh5.9 billion, while the total deposit book dropped by 2.5 percent to Sh346.9 billion.

“Thankfully, we have been able to claw back on our previously high expenditure on interest. We are not going to grow our liabilities just for the sake of it and that’s why our net interest margins are up 40.0 basis points. Today our fixed deposits are down by Sh50.0 billion and that means we have literally halved our concentration there,” Oigara said.