Standard Chartered Bank Kenya (SCBK) has warned investors that its full-year profit for 2025 is expected to fall sharply, weighed down by the financial impact of a protracted legal battle over employee benefits.
In a statement released on Monday, the bank projected that its earnings after tax for the year ending 31 December 2025 would be at least 25% lower than last year’s, mainly due to a tribunal ruling in favour of pensioners that has forced the lender to absorb significant one-off costs.
The profit warning, issued in line with Kenyan capital markets regulations, is the bank’s first in several years and highlights the financial strain caused by the dispute. The case, filed under Abdalla Osman & 628 Others vs The Retirement Benefits Authority & 11 Others, centred on the rights of retirees to enhanced pension benefits.
The ruling, first issued in 2022 and upheld on appeal in 2023, required SCBK to make retroactive adjustments to its pension obligations. In May this year, the Retirement Benefits Appeals Tribunal ordered the bank to comply fully, a decision that will weigh heavily on its 2025 financial performance.
The tribunal’s ruling obliges SCBK to account for pension liabilities stretching back several years, significantly reducing the bank’s earnings. The bank said the adjustment would cut into profits, even as its underlying operations remain stable.
“The impact is due to the judgment of the Retirement Benefits Appeals Tribunal, which will affect SCBK’s overall cost base in line with its 149 employee benefits accounting for past service costs,” the lender noted.
The development marks a rare public setback for Standard Chartered in Kenya, where the lender is seen as one of the country’s most stable and well-capitalised banks. Despite the expected dip in profitability, the bank reassured shareholders and customers of its long-term financial health.
“The profit warning is based on unaudited results for the period ended 31 August 2025, factoring in the pension-related adjustments,” said Kellen Kariuki, the bank’s chairperson. “SCBK is adequately capitalised and remains resilient to meet anticipated obligations.”
The lender, which is part of the London-headquartered Standard Chartered Group, emphasised that it would continue to focus on growth, innovation, and sustainability. Management pledged to strengthen cross-border capabilities, tapping into its global expertise to deliver long-term shareholder value.
Profit warnings in Kenya’s banking sector are relatively rare, particularly among Tier I lenders. Analysts say SCBK’s disclosure is likely to unsettle investors in the short term but may have limited impact on its long-term outlook, given its strong capital base and diversified operations.
“The issue here is largely exceptional,” said a Nairobi-based financial analyst. “The pension ruling has imposed a one-time burden, but the bank’s fundamentals remain solid. Investors will be more concerned about whether similar liabilities could arise in future.”
Standard Chartered operates in more than 60 countries globally, with Africa contributing significantly to its earnings. In Kenya, the bank is known for its corporate and institutional banking services, catering to multinational firms and high-net-worth clients.
SCBK will release its audited financial results for the year ending December 2025 in the first quarter of 2026. Investors will be keenly watching whether the bank provides updated guidance on its earnings trajectory and any further pension-related liabilities.
For now, management has sought to assure markets that the bank remains strong and well-positioned to withstand the financial hit.
“We continue to execute our strategy of combining differentiated cross-border capabilities with leading wealth management expertise underpinned by sustainability,” the statement said.
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