Stanbic IBTC Holdings Plc closed 2025 with bottom-line growth of 69.0% YoY, yet the real headline is what happened beneath it. Earnings per share rose 38.5% YoY to N23.68 from N17.10, and that came after the dilutive effect of issuing 2.9 billion new shares in 2025. In other words, the bank grew profits fast enough to outpace a materially larger share count. The engine was interest income: N787.1 billion, up 38.9% YoY and making up roughly 70% of gross earnings.
That growth was not accidental. Stanbic expanded its interest-earning asset base to N5.4 trillion, a 50.5% YoY jump, and eked out a 5bps rise in blended asset yield to 17.9%. The driver was clear: income from investment securities, not loans. Gross loans actually fell 0.4% YoY to N2.5 trillion, so the bank’s IEA growth came largely from loans to banks, with the lion’s share — about 66% — landing in Q4’25. Because that late-year build only contributed for a short period, the FY’25 asset yield uptick was marginal.
However, robust interest income met a headwind in the second half: funding costs. Term deposits acquired in Q3 carried through into Q4, capping Net Interest Income growth at 42.5% YoY despite the 38.9% rise in interest income. Net Interest Margin therefore moved only 2bps YoY to 12.9%. The story here is classic rate-cycle dynamics: assets repriced up, but late-year liability growth came at a price, compressing the spread banks live on.
Non-interest revenue helped cushion that pressure, rising 31.4% YoY to N310.7 billion. The mix shows where Stanbic’s universal banking model paid off: brokerage and financial advisory fees +93.1% YoY, asset management fees +33.0% YoY, and trading revenue +33.7% YoY. Together, NII and NIR pushed operating income to N895.7 billion, +36.8% YoY, which slightly outran operating expenses that grew 35.3%. Consequently, Cost-to-Income Ratio settled at 36.8%, a sign of disciplined cost management even as inflation and scale pushed opex up.
Asset quality also improved. With gross loans down 0.4% and non-performing loans down 19.2%, the NPL ratio fell to 3.4% from 4.2% in FY’24. Cost of Risk dropped sharply to 0.8% from 3.09%, with CardinalStone noting better risk management in Personal and Private Banking. That cleaner loan book, combined with strong income, lifted returns: ROAE of 4.9% vs 3.7% in FY’24 and ROAA of 42.4% vs 38.3%. Tax was the other big cost line: tax expense more than doubled, taking the effective tax rate to 31.0% for FY’25.
Interpretation: Stanbic’s 2025 results show a bank that used balance sheet scale and securities to drive top-line, while fees diversified earnings away from pure lending. The 69.0% bottom-line growth masks the tension underneath — funding cost headwinds arrived in H2 and kept NIM nearly flat despite a 50% larger IEA base. The Q4 surge in loans to banks suggests Stanbic chose liquidity and yield pickup in securities over riskier loan growth, a prudent move given the 0.4% loan decline and improving NPLs. Yet it also means 2026 NIM will depend on whether those Q4 assets reprice fully and whether term deposit costs roll off.
For investors, the takeaway is twofold. First, Stanbic’s EPS growth of 38.5% after dilution shows real earnings power; the N115.27 target price from CardinalStone sits against EPS of N23.68, implying a forward P/E context the market will weigh against funding costs. Second, the bank’s non-interest engines — brokerage, advisory, asset management, trading — delivered double-digit growth and now provide a material buffer if rate cycles turn or credit appetite stays soft. The funding cost story is the one to watch: if term deposit pressure eases, NIM could finally expand on that enlarged N5.4 trillion IEA base. If not, income growth will keep relying on volume and fees to outpace cost of funds.
