Stanbic Declares N67.92bn PAT in Q2 2023 Results; Proposes 150k Interim Dividend,

Stanbic IBTC Holdings is staying on the recovery and growth track for the second year. Stanbic Declares N67.92bn PAT in Q2 2023 Results

Stanbic IBTC Holdings Plc, a financial institution in financial services sector announced 57.4% gross earnings growth in Q2 2023 Results. The Group’s gross earnings increased by 58.18%, profit before tax increased by 107.58% and profit after tax increased by 121.46% for the period ended 30 June 2023. The directors’ recommended the approval of an interim dividend of 150 kobo per share (30 June 2022

Key Highlights

• Gross Earnings grew by 57.4% from N134.87bn to N212.33bn.

• Profit before tax stood at N82.98bn

• Profit after tax stood at N67.92bn

Share Price Currently Stands at N64.50k

Highlights of the Group’s and company’s operating results for the period under review are as follows:

	30 Jun. 2023		30 Jun. 2022	30 Jun. 2023	30 Jun. 2022
	Group		Group	Company		Company
	N’million		N’million	N’million		N’million
Gross earnings	213,334		134,870		34,834		33,952
Profit before tax	82,985	39,978		29,968	31,524
Income tax	(15,066)		(9,309)		(25)		(5)
Profit after tax	67,919	30,669		29,943	31,519
Non controlling interest	(1,606)		(1,371)		–		–
Profit attributable to equity holders of the parent	66,313		29,298		29,943		31,519
Interim dividend proposed/(paid)	19,436		19,436		19,436		19,436

The above performance came after-tax profit of N28.9 billion at the end of the first quarter (Q1).

The bank’s interim financial report for the first quarter ended March 2023, shows a top-speed profit advance of 91.5 percent quarter-on-quarter — powered by strong growth in revenue and a significant gain in margins.

Gross earnings are accelerating from a 39 percent rise to N287.5 billion at the end of 2022 to 45.4 percent year-on-year to close at N95 billion at the end of Q1.

Net profit margin has stretched out from 23 percent in Q1 of last year to 30.4 percent at the end of the same quarter this year.

AThe strong revenue growth and the major gain in profit margin provide a solid base for high prospects for improved returns for shareholders this year.

The bank holding company hopes to resume profit growth in the current financial year after recovering from a 31.5 percent drop in 2021 to build an after-tax profit of N80.8 billion in 2022.

The closing profit for last year remains slightly down from the peak figure of N83.2 billion it posted at the end of 2020.

If the high-speed profit advancement in Q1 is sustained to full year, Stanbic IBTC Holdings can hope to show an after-tax profit in the region of N115 billion in 2023.

Leading the bank’s revenue growth in Q1 is interest income which grew by 52.8 percent quarter-on-quarter to N50.4 billion. Non-interest income, driven by trading revenue of N19.9 billion, also grew by 37.9 percent over the same period to N44.6 billion.

The bank’s management achieved an overall cost moderation that reinforced the strong growth in revenue to boost margins.

While cost of funds maintained a strong growth at 46.8 percent quarter-on-quarter to N14 billion, it slowed down against the 52.8 percent increase in interest earnings.

This provided the strength for an impressive growth of 55.3 percent in net interest income over the period to N36.4 billion.

With the slower growth of non-interest income, however, interest expenses made an incursion on gross earnings, which lowered the growth margin of total income to 45 percent to roughly N81 billion over the period.

Even a much bigger pressure on earnings came from credit loss expenses in Q1. At N3.3 billion at the end of the quarter, net impairment losses on financial assets multiplied close to four times quarter-on-quarter.

This is a major increase in credit losses for the bank for the second year, after shifting from net write back of N1.5 billion in 2021 to a net charge of N10.3 billion in 2022.

Net income, after credit loss charges, amounted to N77.7 billion, which is an improvement of 41.5 percent quarter-on-quarter.

The cost increases from interest and loan loss expenses were more than offset by significant cost savings made from operating expenses.

At 41.4 billion, total operating cost for the quarter grew by 17.3 percent quarter-on-quarter, a significant slowdown relative to the 45 percent growth in revenue.

Operating cost margin, therefore, went down from over 54 percent in the same quarter last year to 43.6 percent at the end of Q1 of the current financial year.

The cost saving here, provided the big leap in profit margin that powered the elevated profit show of the bank in Q1.

It made the difference between the 41.5 percent growth in net income, after loan loss charges and a leap of 85 percent in pre-tax profit quarter-on-quarter to N36.3 billion at the end of the first quarter.