Stanbic IBTC Crosses N900bn in Market Valuation
Ahead of the earnings release, Stanbic IBTC Holding Plc’s market valuation has surged significantly as the market expects that the group will sustain its earnings momentum. The group’s healthy balance sheet and surging earnings attracted bargain hunters seeking to profit from growing and value stocks.
In one year, the stock has doubled down on investors’ wealth. Analysts believe that a higher interest rate environment suggests the group earnings would improve again in the second quarter.
In the first quarter of 2023, the group’s pre-tax profit grew by 85% year on year to N36.3 billion. The group’s net profit grew by 92% year on year to N28.9 billion. The feat was supported by a lower effective tax rate of 20.4% compared with 23.1% in Q1 2022.
The holdings company’s 12.956 billion shares outstanding were valued at N900.5 billion following a sustained rally in the local bourse. The group is expected to release its second quarter earnings results on or before August 17, 2023.
The financial services group’s unaudited result for the first quarter of 2023 showed a 53% increase in Interest Income to N50.4 billion driven by improved yields on risk assets.
In the period, Stanbic IBTC reported that its net Loans to customers declined marginally, down 0.6% in from December 2022. Due to rising inflation pressures, interest expenses grew strongly, up 47% to N14.0 billion.
Stanbic IBTC’s customer deposits were up 6.4% in Q1 2023 compared with December 2022. The group saw an improvement in its current and savings accounts ratio to 74.9% in Q1 2023 compared with 71.7% in financial year 2022.
Overall, the financial services group’s net interest income increased by 55% year on year to N36.4 billion. Supporting the group’s bottom line, net fee and commission jumped up by 15% year on year, supported by growth in asset management fees.
Other Income (Income from life insurance activities, trading Revenue, and Other Revenue) grew significantly, up 85% year on year. The growth in Other Income was due to an 89% growth in revenue on fixed income and currencies to N19.9 billion
The group reported an Impairment Charge of N3.3 billion in Q1 2023, which was 283% higher than N856 million reported in Q1 2022. There is an indication the bank faced asset quality pressure due to rising non-performing loans.
In the first quarter of the year, Stanbic IBTC closed the period with a non-performing loan ratio of 2.5% compared with 2.4% in December 2022. In December 2021, the group’s non-performing loan ratio was 2.1%.
It reported that the group saw its operating expenses surged 17% year on year. The moderate growth in operating expenses compared with the strong growth in operating income led to an improvement in Cost to Income Ratio.
The Group’s total capital adequacy ratio printed higher at 20% in Q1 2023, and its Banking arm capital ratio settled at 15.4% which was significantly higher than the 11% minimum regulatory requirement. #Stanbic IBTC Crosses N900bn in Market Valuation