Stanbic IBTC Holding Plc announced a pre-tax profit of N62.713 billion for the first
quarter ending on March 31, 2024, marking a 72.95% year-on-year (YoY) rise.
According to the bank’s consolidated and separate financial statements for the period,
Stanbic IBTC disclosed a noteworthy interest income of N115.803 billion, reflecting a
remarkable 129.69% surge, which in turn drove a 111.38% expansion in net interest
income to N76.900 billion.
Key highlights (Q1 2024 vs Q1 2023)
Gross earnings: N billion +70.69% YoY
Interest Income: N115.803 billion +129.69% YoY
Interest Expense; N38.903 billion +177.13% YoY
Net interest income; N76.900 billion +111.38% YoY
Non-interest revenue: N61.335 billion +37.50% YoY
Net fees and commission income: N41.685 billion +67.24% YoY.
Net impairment loss on financial assets: N7.105 billion +116.62% YoY
Income after credit impairment charges: N131.130 billion +68.75% YoY
Profit for the period N45.639 billion +58.137% YoY.
Earnings per share N3.45+59.72% YoY
Loans and advances to customers N2.164 trillion +6.46%.
Cash and Cash equivalents N1.733 trillion +25.12%
Total Assets N5.977 trillion +16.16%.
Customers’ deposits N2.262 trillion +9.12%.
Commentary
Interest income from loans and advances to customers continues to be a major driver of
interest income, constituting 79.44% of interest income.
However, despite the significant 119.8% increase in interest income from loans and
advances, reaching N91.989 billion, the impairment loss from loans and advances to
customers also surged by 111.6% to N7.668 billion.
This indicates that while the bank has effectively expanded its lending operations, the
considerable rise in impairment loss suggests that a greater proportion of loans
might be susceptible to default or non-repayment.
Furthermore, it is important to note that there was an improvement in the contribution
of interest income from investment in securities to total interest income in Q1 2024,
rising to 17.5% from 15.7% in Q1 2023.
The rise in the portion of interest income derived from investments in securities indicates
a broadening of revenue sources beyond conventional lending operations. This
diversification can help mitigate risks associated with fluctuations in lending markets
and enhance overall revenue stability.
Moreover, the significant difference between interest income derived from loans and
advances and interest expenses incurred on customers' deposits likely influenced the net
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interest income. This indicates a strong performance in the bank's fundamental banking
activities, reinforcing its financial stability and profitability.
Additionally, the bank witnessed growth in non-interest income, primarily driven by an
increase in asset management fees, which surged by 49.6% year-on-year to N23.934 billion,
constituting 39% of total non-interest revenue.
This improvement is expected to positively affect investor sentiment, potentially leading to
increased confidence among investors, especially amid the challenging task of meeting the
regulatory new capitalization requirements. Stanbic IBTC has experienced a notable shift in
share price performance, transitioning from an impressive 108.22% year-to-date gain in 2023
to a 35.4% year-to-date decline in 2024.