Stanbic IBTC Holdings Nets N141bn At Full Year, Strongest Growth In 6 Years 

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Stanbic IBTC Holdings Plc has posted an after-tax profit of N140.6 billion at the end of its 2023 full year, beating its forecast of N130 billion for the year.

The profit for the year is a clear 74 percent advance from the restated figure of N80.7 billion in 2022 and marks the strongest profit improvement since 2017. Quarterly profits however went down in the final quarter from N41 billion in the third quarter to N31 billion and the growth rate dived as well from 68.5 percent to 19 percent over the period.

The bank’s unaudited full-year financial report at the end of December 2023 shows a sustained slowdown in profit improvement across quarters from 121 percent to N67.9 billion at the half-year to near doubling to N109 billion at the end of the third quarter and further to 74 percent increase at full year.

The slowdown in profit improvement was caused by pressure from the rising cost of funds, as interest expenses increasingly claimed higher proportions of interest earnings.

Cost of funds surged upward 157.6 percent to N31 billion in the final quarter far ahead of an increase of 88.6 percent in interest income during the quarter. Cost of funds claimed 36.4 percent of interest income in the quarter, rising from 26.7 percent in the same quarter in the preceding financial year.

The full-year position shows that interest costs rose by 141 percent to N95.4 billion while interest earnings grew by 77 percent to N270.6 billion.

Net interest income still grew strong enough at the end of the year at about 55 percent to N175 billion. Net impairment losses on financial assets rose by 50 percent to N15.5 billion in the year while net interest income after net impairment losses improved by over 55 percent to N159.7 billion.

Non-interest income, which was driven by trading revenue, grew by 42.5 percent to about N180 billion at the end of the year. The outstanding growth of 140 percent in trading revenue to N59.7 billion at the end of the third quarter however showed down to 80 percent to stand at N62.5 billion at the full year, as a sharp drop occurred in the income line in the final quarter.

Total income net of credit loss charges grew by 48 percent to N339.7 billion at the end of the year. This was boosted by cost savings from operating expenses that grew at a moderate rate of 29.4 percent to N166.8 billion.

The cost savings reflect a decline in operating cost margin from 46.2 percent in 2022 to 37 percent in 2023, the lowest cost margin for the bank in not less than 13 years.

The cost savings from operating expenses and strong revenue growth were the propelling forces of the bank’s elevated profit performance in 2023. Gross earnings grew by 61.5 percent to close at N450.6 billion at the end of the year, which is accelerated growth from a 36.4 percent increase in 2022 and the strongest revenue improvement in several years. Revenue improvement with some cost savings enabled a gain in net profit margin from 28.9 percent in 2022 to 31.2 percent at the end of 2023.

The bank achieved full recovery and resumed positive growth in profit performance in 2023 after it suffered a drop of 31.5 percent in after-tax profit to under N57 billion in 2021 and closed below the 2020 profit peak of over N83 billion in 2022.

Stanbic IBTC Holdings closed the 2023 financial year with an asset base of over N5 trillion dominated by net loans and advances of over N2 trillion, cash-based assets of N1.4 trillion, derivative assets of N550.7 billion, and financial investments of N435.7 billion.