• Stanbic bank reported a solid set of 2Q23 numbers, with the total income rising a sharp 57.0% YoY to N90.3 billion, primarily due to a whopping 326.8% YoY jump in trading revenue to N24.8 billion in 2Q23, supported by a 34.9% YoY spurt in net interest income to N36.3 billion, along with a 76.5% YoY increase in non-interest revenue to N54.0 billion. Interest income surged 69.8% YoY to N59.8 billion due to a rise in the volume and the average yield of loans and investments, partially offset by a 182.5% YoY jump in interest expense to N23.5 billion, resulting in a 34.9% YoY rise in net interest income to N36.3 billion in 2Q23 from N26.9 billion in 2Q22. Furthermore, Stanbic reported solid performance sequentially and reported an 11.5% QoQ spurt in the total income compared to N81.0 billion in 1Q23, while net profit grew 35.3% QoQ to N39.1 billion in 2Q23 versus N28.9 billion in 1Q23.
   
• In 2Q23, the non-interest revenue soared to N54.0 billion, a 76.5% YoY increase. The non-interest revenue increased primarily due to an 4.3x YoY jump in trading revenue to N24.8 billion in 2Q23 versus N5.8 billion in 2Q22. The net fee and commission revenue grew 10.0% YoY to N26.2 billion in 2Q23. Moreover, Stanbic reported a loss of N104 million in 2Q23 from the insurance operations compared to a profit of N420 million in 2Q22. The company’s net impairment loss on financial assets reduced by 44.7% to N2.7 billion in 2Q23 versus a net impairment loss on financial assets of N4.9 billion in the prior period.
   
• The bank’s operating expenses soared 26.8% YoY to N40.8 billion in 2Q23 due to increased inflationary impact and growth in regulatory-induced costs, and additional investments in information technology to position the group as a platform business. The other operating expenses jumped 27.1% YoY to N25.4 billion, and staff costs increased 26.3% YoY to N15.5 billion in 2Q23 from N12.3 billion in 2Q22. Although the company’s tax expenses grew to N7.7 billion in 2Q23 (effective tax rate of 16.7% in 2Q23 compared to 20.4% in 2Q22), Stanbic recorded a huge 150.4% YoY jump in net profit to N39.0 billion owing to the solid revenue growth and a proportionately lower increase in operating expenses; the earnings per share stood at N2.95 in 2Q23 versus N1.15 in 2Q22.
   
• Looking at the financial performance by segments, total income in the Business & Commercial segment expanded by 24.8% YoY to N14.0 billion. At the same time, the segment’s net profit stood at N5.0 billion in 2Q23 versus a profit of N755 million in 2Q22, a 6.6x YoY increase. The Corporate and Investment Banking segment was the best performer in the quarter, with total income rising a massive 69.4% YoY to N41.4 billion and net profit soaring 167% YoY to N25.5 billion in 2Q23. Notably, the performance of the Consumer & High Net Worth segment was boosted in 2Q23 with a 43.4% YoY growth in total income to N32.1 billion and a net profit surge of 66.6% YoY to N8.6 billion in 2Q23. The bank recorded solid growth in gross loans and advances to customers that stood at N464.7 billion in 1H23, a 55% YoY jump, driven primarily by a 72.9% YoY growth in the Corporate and Investment Banking segment to N1,192.3 billion from N689.5 billion in 2Q22.
   
• Stanbic IBTC Holdings PLC has announced an Interim Dividend of N1.50 per ordinary share of 50 kobo each, subject to deduction of appropriate withholding tax and regulatory approval. The dividend will be paid to shareholders whose names appear in the Register of Members as at the close of business on Tuesday, 12 September 2023.
   
• On August 21, 2023, the bank changed the name of its fintech subsidiary from ‘Stanbic IBTC Financial Services Limited’ to ‘ZEST Payments Limited’ (ZEST), following the receipt of all regulatory approvals.

Market Reaction: The investor reaction to solid 2Q23 performance was subdued as the stock declined 0.16% to N62.70 versus a 0.08% loss for the All-Share Index on 30/8.