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Stanbic IBTC posts N31 billion PAT in H1 2022

Stanbic IBTC Holdings Plc has posted a profit of N31 billion for the first half of the year 2022, a 36% high from the N23 billion it reported in the first half of last year.

Amid an inflationary period witnessed in the first six months of the year 2022, the company saw its gross earnings rise by 42 billion from N93 billion in the half year 2021 to reach N135 billion in half year 2022.

Financial report by the company shows that the net interest income stood at N50 billion in the first half of 2022, indicating a jump from the 32 billion in the same period last year. This is as the net income and net expenses were valued at N68 billion and N18 billion respectively in the study period compared to N44 billion and N11 billion in the first half of last year.

While the holding company is known for operating diverse subsidiaries including insurance, banking, and investment advisory amongst others which contributes to its non-interest revenue.

Net fees and commission revenue were N46 billion in H1 2022 from N41 billion in H1 2021 with the most income from Asset management fees at N28 billion followed by a brokerage and financial advisory fees at N5.8 billion and others during the period of study while the fees and commission expenses was N2.635 billion in H1 2022, a slight movement from the N2.626 billion in H1 2021.

Similarly, the income from life insurance activities was valued at N136 million after the insurance premium revenue ceded to reinsurers and insurance benefits and claims paid were deducted from the insurance premium received.

Notably, the group saw massive growth in the record of gross premium income in H1 2022 at N7.4 billion from the low record of N453 million last year. The difference signifies proof of return to economic activities compared to last year when many businesses still struggled to get back on their feet.

Trading revenue was up to reach N16 billion in H1 2022 from N5.4 billion and other income was valued at N938 million in H1 2022 from a loss of N904 million in H1 last year.

Stanbic IBTC saw operating expenses go up to a value of N68 billion as a result of an increase in staff costs and other operating expenses. Earnings per share stood at N226 in H1 2022 compared to N192 in H1 2022 of the previous year. Total assets also increased to reach N3.1 trillion in H1 2022 compared to H1 2021 which saw the total asset at N2.7 trillion. Stanbic IBTC last traded at N28 as of 24th of August 2022 while it market capitalization stood at N363 billion.

Commenting on the results, Dr Demola  Sogunle, Chief Executive Stanbic IBTC, said:“Despite the challenges we faced within the Nigerian operating environment in the first half of the year, we reported significant growth in our key metrics. Following our return to growth trajectory in the first quarter, the Group’s profitability increased by 36% year-on-year (YoY) driven by growth across our revenue streams, amid increased operating expenses. Our continued focus on the core of our business which is to grow our loan and deposit books, led to a 54% growth in interest income year-on-year. The increase in interest income arose from increase in the volume and average yield of loans and investments. Net fees and commission income increased by 10% year-on-year, attributable to growth in digital transaction volumes, investment banking fees, and fees from increase in Assets Under Management (AUM). Trading income also recorded a reasonable increase from prior year due to improved trading activities. Our operating expenses on the other hand, increased by 23% year-on-year, due to increased inflationary impact and growth in regulatory induced costs such as AMCON levy, as well as additional investments in information technology to position the Group as a platform business. We however saw an improvement in our cost-to income ratio from 70.3% in the prior year to 59.9%. We have remained consistent in offering solutions that add value to our customers. Recall that we launched our Life Insurance subsidiary last year and within one year of operations, the company has been able to grow its business and profitability considerably, placing it among the top life insurance companies in Nigeria. In line with our drive of being a platform-based business, we plan to launch our Fintech subsidiary in the next quarter of the year to further boost our end-to-end financial service offering, contribute to our agility in the delivery of solutions to our clients and drive up our enterprise value. We have also made some progress following the launch of our Infrastructure Fund last year which operates as an alternative investment solution to bridge the gap between the long-term funding needs of infrastructure projects promoters and the needs of investors with patient capital. The fund was able to raise ₦6.75 billion in the Series I offer last year and closed the Series II fund raise with ₦15.65 billion in June 2022.

Aligning with our commitment towards delivering to our shareholders, an interim dividend of₦1.50has been declared. We further demonstrated commitment towards achieving our sustainability goals during the first half of the year by promoting financial literacy, access to inclusive quality education, and enterprise growth. In celebrating the Global Financial Literacy Day, we engaged about 7,300 students through presentations at one school in each of the thirty-six states in Nigeria, including the FCT. We also disbursed credit facilities of over ₦3.02 billion to support educational service providers in Nigeria. This is in addition to the donations and scholarships we provided to both secondary and tertiary institutions within the first half of the year. We further disbursed loans worth about ₦14.03bn to almost 2,500 SME clients. Hence, we were awarded the bank of the year in terms ofsustainability according to the 2021 Industry Awards.We are on track in the achievement of the guidance we provided for the year following the progress we have witnessed based on our H1 2022 results.

”Financial highlightsFinancial position

•Total assets increased by 15% to ₦3.15trillion (December 2021: ₦2.74 trillion)

•Gross loans and advances up 16% to ₦1.09 trillion (December 2021: ₦946.26billion)

•Non-performing loans increased by 24% to ₦25.28billion (December 2021: ₦20.39 billion)•Non-performing loan to total loan ratio of 2.3% (December 2021: 2.1%)•

Customer deposits increased by 6% to ₦1.19 trillion (December 2021: ₦1.13 trillion)•

Deposit mix improved to 68.6% (December 2021: 66.0%) of current-and-savings-accounts deposits to total deposits Income statement•Net interest income of ₦50.35billion, up 53% (H1 2021: ₦32.88billion)•

Non-interest revenue of₦62.96billion, up 37% (H1 2021: ₦45.91billion) •

Total operating income of ₦113.31billion, up 44% (H1 2021: ₦78.79billion)•

Profit before tax of ₦39.98 billion, up 62% (H1 2021: ₦24.71billion)•

Profit after tax of ₦30.67billion, up 36% (H1 2021: ₦22.54 billion)•

Cost to income ratio of 59.9% (H1 2021: 70.3%)

•Return on average equity (annualised) 15.7% •

Return on average assets (annualised) 2.0%

Capital and liquidityThe Group continued to maintain an adequate level of capital during the period. The Group’s total capital adequacy ratio closed at 19.7% (Bank: 15.0%) which is significantly higher than the 11% minimum regulatory requirement.

The Group also maintained a strong and diversified funding base during the first half of 2022. The Group’s liquidity ratio was above the 30% regulatory minimum requirement, indicating the Group’s commitment to meeting its liquidity obligations in a timely manner.

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