Stanbic IBTC’s Gross Earnings Improves Despite Weak Macroeconomic Environment

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Stanbic IBTC Holdings PLC (STANBIC) released the Q3- 2020 financial result showing a 4.1%YoY increase in gross earnings to N183.29 from the N176.16 recorded in 2019. This represents a modest topline growth as the effect of the COVID-19 pandemic ease on the business activities following the gradual opening of the economy in Q3 2020.

Interest Income and Expense Declined amid low yield environment

Net Interest income however waned by 4.1%YoY to 56.26bn due to low yield on the asset. Notably, interest income declined by 10.0%YoY to N81.96bn followed by a 20.6 % declined in interest expense amid repricing of deposits. Impairment charges, however, rose sharply to N7.00 bn when compared to the N0.9bn write back in 2019. This came as expected given the fragile macro environment and push from the CBN on meeting the Loan to Deposit ratio target.

Earnings Boosted by Surge in Trading Revenue

STANBIC growth in Gross earnings was majorly driven by the increase in Non-interest income by  20.2%YoY to N98.45. Specifically, Non-interest income was buoyed by a surge in trading revenue by 63.18%. Trading revenue advanced from N27.19bn to N44.37bn following STANBIC strong position in the Asset management, pension and another aspect of the capital market favoured by fluctuation in yield and FX market rate.  Net Fees and Commission revenue, however, declined marginally by 0.78%YoY to N52,955.

Net Profit Margin improved to 36.10%

Following the gains from the topline,  Profit Before Tax (PBT) advance by 11.2% to N76.87 billion with a decline in operating expense by 1.0%. Consequently, Profit After Tax (PAT) increased by 19.1% to N16.16bn representing 36.10% compared to 31.54% in the earlier period.

Stanbic IBTC's Gross Earnings Improves Despite Weak Macroeconomic Environment Brandspurng
SOURCE: Company filings, PFI Capital | www.brandspurng.com

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