Standard Chartered may have been too good a bank to avoid the pitfalls of the interest rate caps while other lenders devised devious ways to avoid it.

A review by Standard Investment Bank on a supply of money showed that the value of interest-earning accounts contracted by Sh176.23 billion to Sh1.017 trillion between August 2016, when new law controlling interest rates was enacted, and December 2016.

StanChart, however, seems to have taken a different approach, gifting depositors with almost Sh2 billion while the rest of the banks were changing account status from deposit earning to transactional to avoid paying the 70 percent rate recommended by the rate cap law.

StanChart is the first bank to close its net earnings in the red (so far) at Sh1.8 billion. Apex Africa Research Analyst Shaniza Kassam said that StanChart’s total interest expense grew at a faster pace than the total interest income received by the bank.

Total interest expense spiked 16.4 percent year on year and 4.1 percent quarter on quarter to Sh1.9B attributable to 13.1 percent year on year rise in customer deposits to Sh231.9 billion.

As a result, the bank’s cost of risk spiraled 110 basis points year on year to 3.7 percent.