Stanbic Grows Profit By 113% in H1, Declares 60k Interim Dividend

Stanbic IBTC Holdings Plc. H1’17 results released the floor of the Nigerian Stock Exchange has shown a 113 per cent growth in Profit after tax (PAT) that settled at N24.1 billion from N11.317 billion declared in the corresponding period of 2016.

Gross earnings for the banking group also grew by 36.3 per cent to N97.2 billion, prompting the bank’s directors to declare an interim dividend of 60 kobo per share to shareholders.

The results revealed profit before tax increased by 86 percent to N29.169 billion during the period, from N15.682 billion last year while total assets went up by 21 percent to N1.273 trillion from N1.053 trillion in December 2016.

Expressing delight at the result, Chief Executive Officer, Stanbic IBTC Holdings Plc, Yinka Sanni, stated, “The domestic environment in the first half of 2017 recorded a decline in headline inflation, improved foreign exchange liquidity and a gradual economic expansion as measured by the Purchasing Managers’ Index. The improved operating environment positively impacted our businesses leading to significant improvement in our financial results.”

He further stated, “Income before impairment charges grew by 43 percent, driven by a sustained growth in yields from investment securities and trading activities. Interest income increased by 55 percent and trading revenue grew by 81 percent, positively impacting profit after tax which increased by 113 percent year-on-years. The balance sheet grew by 21 percent year-to-date as trading assets and financial investments increased by over 100 percent and 19 percent respectively. Our cost-to-income ratio continued to witness improvement, standing at 47.0 percent at the end of H1 2017 when compared with 57.7 percent in H1 2016. The growth in non-performing loan ratio is on account of some newly classified loans in line with economic realities. We are optimistic that this would moderate towards the end of 2017.”

He noted that, “Stanbic IBTC’s progress over the first half year was impressive in many areas and in particular, we are delighted with our ranking following the latest release of KPMG Banking Industry Customer Satisfaction Survey, which showed our retail banking business improving in ranking from the 4th position to the 3rd position and our corporate banking business improving from the 10th position to the 4th position. This is well-aligned with our strategy to drive customer centricity.”

Sanni said, “The group will continue to explore opportunities to grow our business and market share responsibly through the adoption of an appropriate risk appetite and excellent service delivery.”

The Group maintained adequate capital to support its business and drive business growth in H1 2017. The group’s total capital adequacy ratio at the close of the period was 22.9 percent (Bank: 20.2 percent) and Tier 1 capital adequacy ratio of 19.2 percent (Bank: 16.1 percent). These ratios are well above the 10 percent minimum statutory requirement. The group’s liquidity ratio closed at 100.24 percent, while the Bank’s liquidity ratio was at 90.37 percent at the end of H1 2017. This ratio is significantly higher than the 30 percent regulatory minimum.

Other highlights of the results showed Interest income spiked by 54.5 per cent YoY to N56.7 billion in H1’17, supported by strong growth in interest earned from its money market mutual funds which rose by 182.5 per cent.

Non-interest income increased moderately by 17.7 per cent YoY to N40.3 billion in H1’17, buoyed by the 21.4 per cent YoY and 81.1 per cent YoY growth in asset management fees and trading revenue respectively.

Although impairments charges rose by 65.1 per cent YoY and 219.4 per cent QoQ to N14.0billion and N10.6 billion in H1’17 and Q2’17 respectively. Net loans and total assets increased by 4.2 per cent and 20.9 per cent to N368 billion and N1.3 trillion respectively. Net assets increased by 14.7 per cent to N161.5 billion.

In a separate notice to shareholders, Stanbic advised that in line with the authority granted to Directors by Shareholders at the 06 August 2015 Extra Ordinary General Meeting, and as published in the Notice of the 5th Annual General Meeting of Stanbic IBTC Holdings PLC (“the Company”) dated 10 August 2017, Shareholders have a choice of receiving dividends declared by the Company, up to year 2020, either in cash or may elect to receive their dividends as new ordinary shares in the Company (“scrip dividend”).

The lender said that “Where a shareholder elects to receive his or her dividends by way of new ordinary shares, then such scrip dividend shall only be allotted after receipt of any required regulatory approval and shall apply to shareholders whose names were on the Register of Members as at the qualification dates for the payment of such dividends (“Qualifying shareholders”).

Stanbic said, “In order to be valid, any scrip dividend election by shareholders, must be made to the Company’s Registrars, not later than seven working days prior to any dividend payment date.”

With respect to the five (5) kobo dividend being recommended by Directors for approval at the 5th Annual General Meeting of the Company, holding on Tuesday 12 September 2017, the qualification date as previously published was Monday 03 April 2017.

“The reference price to be used in determining any scrip dividend allotment shall be the volume weighted average price (VWAP) of the Company’s shares on The Nigeria Stock Exchange (The NSE) for the five business days commencing on the day the ordinary shares are first quoted ex-dividend.

With respect to the five (5) kobo dividend indicated above, the reference price for determining the scrip dividend allotment is N18.20 (eighteen naira twenty kobo).”