Stanbic IBTC Holdings Plc Profit Climbs to a New High in Over 13 Years

According to data from BusinessDay, Stanbic IBTC Holdings Plc's generated profit in the first quarter (Q1 2024) of this year was the highest in at least 13 years.

In the first quarter of 2023, its pre-tax profit increased to N62.7 billion from N36.2 billion, while its after-tax profit increased to N45.6 billion from N28.8 billion.

Stanbic IBTC Holdings Plc also reported an increase in net interest income of 111.4 percent to N76.9 billion and a growth in gross earnings of 135.8 percent to N117.1 billion.

"This was driven by a strong interest income, up by 129.7 percent to N115.8 billion, following an improvement in asset yields, masking the 177.1 percent increase to N28.9 billion in interest expense," analysts at Cardinalstone Research said in a recent note.

The lender revealed that net fees and commission income increased from N24.9 billion to N41.6 billion, a 67.2 percent increase.

Analysts observed that the primary causes of this increase were the rise in investment banking fees and the volume of digital banking transactions.

Stanbic reported that despite a 65% increase in operating expenses in the first three months of the previous year, better top-line performance was the primary driver of the company's cost-to-income ratio improvement, which increased from 49.5 percent in Q1 to 51.2 percent in Q1 of this year.

Its basic earnings and diluted per share in the reviewed periods increased from N2.16 to N3.45.

The holding's total assets increased by 16% to N5.97 trillion from N5.14 trillion, largely due to growth in total deposits and the revaluation of foreign currency deposits. While total liabilities increased from N4.62 billion to N5.43 billion.

Equity attributable to ordinary shareholders rose to N544 billion from N506 billion.

Further analysis of the group's statement reveals that it recorded an impairment charge of N7.1 billion to account for the 85.8 percent increase in gross loans.

The group's net cash flows for investing activities were N50 billion, down from a negative N117 billion, while its net cash flows from operating activities increased to N791 billion from N99 billion.

In the first three months of this year, net cash flows used for financing activities increased to N140 billion from N8 billion during the same period the previous year. Meanwhile, cash and cash equivalents increased to N1.4 trillion from N617 billion.

The group's total capital adequacy ratio finished 14.6% in the first three months, higher than the 11 percent minimum regulatory requirement.

Stanbic IBTC Holdings stated during its 12th Annual General Meeting on May 16 in Lagos that the bank's directors will seek shareholder approval to establish a Debt Issuance Programme of up to N400 billion (or equivalent in foreign currency).

"The purpose is to issue various types of debt securities, including senior unsecured or secured, subordinated, convertible, preferred, equity-linked, or other forms of debt obligations. The issuance may be through public offering, private placement, or other methods, in tranches and at dates, rates, and terms determined by the Directors, subject to regulatory approvals," the statement said.