August 30, 2023/Research & Strategy
Futureview Financial Services
1WK | 4WK | 3MO | 6MO | 1YR | YTD |
-2.64% | -9.64% | +57% | +82% | +124% | +87.7% |
STANBIC IBTC HOLDINGS PLC H1 2023 ANALYSIS | ||||
KEY LIEN ITEMS in MILLIONS | H1 2022 | H1 2023 | Y/Y | |
Interest Income | 68,248.00 | 110,259.00 | 62% | |
Interest Expense | 17,895.00 | 37,575.00 | 110% | |
Net Interest Income | 50,353.00 | 72,684.00 | 44% | |
Income After Credit Impairment Charges | 107,843.00 | 165,323.00 | 53% | |
Operating Expenses | 67,865.00 | 82,338.00 | 21% | |
Profit Before Tax | 39,978.00 | 82,985.00 | 108% | |
Income Tax Expense | 9,309.00 | 15,066.00 | 62% | |
Profit After Tax | 30,669.00 | 67,919.00 | 121% | |
EPS | 2.26 | 5.12 | 127% | |
Total Asset | 3,148,856.00 | 4,451,179.00 | 41% | |
Total Liability | 2,770,861.00 | 4,000,004.00 | 44% | |
Net Asset | 377,995.00 | 451,175.00 | 19% | |
| 28.00 | 62.8 | 124% | |
RATIOS | H1 2022 | H1 2023 | Y/Y | |
Net Interest Margin | 74% | 66% | -8% | |
Operating Expense Margin | 99% | 75% | -25% | |
Tax Rate | 23% | 18% | -5% | |
Net Profit Margin | 45% | 62% | 17% | |
ROAA | 1% | 2% | 1% | |
Earnings Yield | 8% | 8% | 0% | |
P/E Ratio | 0.12 | 0.12 | 0% | |
Return on Equity | 0.11 | 0.18 | 8% | |
This report provides an analysis of STANBIC IBTC Holdings PLC’s financial performance for the first half of 2023 (H1 2023) compared to the same period in 2022 (H1 2022). The analysis covers key financial indicators, ratios, and market-related information to assess the company’s operational and financial health.
Financial Performance Highlights
STANBIC IBTC saw a substantial increase in interest income, rising from ₦68.2 billion in H1 2022 to ₦110.3 billion in H1 2023, representing a remarkable 62% Y/Y growth. The company experienced a significant increase in interest income, indicating improved lending and investment activities. Interest expense also increased significantly, from ₦17.9 billion in H1 2022 to ₦37.6 billion in H1 2023, reflecting a 110% Y/Y growth, the higher interest expense is attributed to increased borrowing costs, which is due to rising interest rates. Despite the higher interest expenses, the net interest income improved to ₦72.7 billion in H1 2023, showing a 44% Y/Y increase. The growth in net interest income indicates improved profitability from core lending and investment activities. The profit before tax surged to ₦83.0 billion in H1 2023, exhibiting an impressive 108% Y/Y growth. The substantial increase in profit before tax reflects enhanced operational performance and effective cost management. Income tax expenses also grew by 62%, reaching ₦15.1 billion in H1 2023.
The higher tax expense is in line with increased profitability and income levels. The company’s profit after tax soared from ₦30.7 billion in H1 2022 to ₦67.9 billion in H1 2023, an astounding 121% Y/Y increase. The significant growth in profit after tax highlights the company’s robust financial performance. EPS increased significantly by 127%, from ₦2.26 in H1 2022 to ₦5.12 in H1 2023, indicating strong earnings growth.
Financial Position
Total assets expanded by 41%, rising from ₦3.15 trillion in H1 2022 to ₦4.45 trillion in H1 2023, reflecting the company’s growth, asset acquisition and increased business activity. Total liabilities also increased by 44%, reaching ₦4.0 trillion in H1 2023, reflecting an increase in obligations. In the same vein, net assets increased by 19%, totaling ₦451.2 billion in H1 2023. The increase in net assets reflects improved company value and financial strength.
The market price of STANBIC IBTC shares rose from ₦28.00 in H1 2022 to ₦62.80 in H1 2023, marking a substantial 124% Y/Y increase. The substantial increase in market price indicates positive investor sentiment and confidence in the company’s prospects.
Financial Ratios
Net Interest Margin decreased from 74% to 66%, indicating a slight decline in interest income generation efficiency. Operating Expense Margin decreased from 99% to 75%, showing improved cost management. Tax Rate decreased from 23% to 18%, leading to reduced tax burden. Net Profit Margin Increased from 45% to 62%, indicating enhanced profitability.
Return on Average Assets (ROAA) Increased from 1% to 2%, indicating improved asset utilization. Earnings Yield remained stable at 8%, indicating consistent earnings generation. Price-to-Earnings (P/E) Ratio remained stable at 0.12, suggesting a consistent valuation relative to earnings. Return on Equity (ROE) Increased from 0.11 to 0.18, indicating better returns for shareholders.
Conclusion
STANBIC IBTC Holdings PLC demonstrated strong financial performance in H1 2023 compared to H1 2022, with notable increases in key financial indicators such as profit, EPS, and market price. Despite a decline in certain margins, the company’s effective cost management, improved asset quality, and increased profitability contributed to its positive performance. The significant growth in total assets and liabilities suggests expansion and potential growth opportunities. Overall, the company appears to be on a positive trajectory in terms of both financial performance and market sentiment.
An Interim Dividend of 1.50 (One Naira Fifty Kobo) per ordinary share of 50 kobo each, that is, =N=19,435,495,744.50, subject to deduction of appropriate withholding tax and regulatory approval, will be paid to shareholders whose names appear in the Register of Members as at the close of business on Tuesday 12 September 2023.
