FSDH Initial Reaction: Stanbic IBTC FY23 results 
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April 8, 2024/FSDH Research

Key Performance Highlights:

• In FY23, Stanbic Bank’s Total Income surged 48.3% YoY to N355.2 billion, primarily driven by a robust 54.9% YoY growth in Net Interest Income and supported by a 42.5% YoY rise in Non-interest Income. Segment-wise, the growth in Total Income was majorly driven by growth in the Corporate and Investment Banking segment (46.9% of FY23 total income), up 55.7% YoY. This was followed by Personal and Private Banking (13.5%) Income rising 121.9% YoY to N48.0 billion, Business & Commercial (16.8%) Income rising 26.7% YoY to N59.8 billion, and Insurance & Asset Management (23.4%) Income increasing 23.6% YoY to N83.1 billion.
   
• Net Interest Income was up 54.9% YoY to N175.2 billion, with a 77.2% YoY jump in Interest Income to N270.6 billion, partially offset by 141.2% YoY growth in Interest expense to N95.4 billion. Interest Income grew mainly due to increased Interest on loans and advances to customers, whereas interest expense increased primarily due to higher Borrowed Funds. Stanbic’s Non-Interest revenue grew substantially by 42.5% YoY to N180.0 billion in FY23, primarily due to a jump in Trading revenue from N34.7 billion in FY22 to N62.5 billion in FY23. Additionally, Net Fee and Commission revenue increased by 21.1% YoY, mainly due to higher Asset management fees. The loss from life insurance activities was N1.5 billion in FY23, compared to N0.6 million a year ago. Net Impairment Loss on financial assets rose to N15.4 billion during FY23 Vs. N10.3 billion in FY22.
   
• Stanbic Bank reported a 29.4% YoY rise in Operating expenses to N166.8 billion in FY23, reflected by increased Staff costs of N65.8 billion (up 29.0% YoY) and higher Other Operating expenses of N101.04 billion (up 29.7% YoY). Although Stanbic’s tax expense rose from N19.5 billion in FY22 to N32.3 billion in FY23. Subsequently, Profit for the year soared 74.2% YoY to N140.6 billion, compared to N80.7 billion in FY22, driven by robust Income growth and proportionally less operating expense growth. All the segments reported growth in Net profit except for Personal & Private Banking reported a loss of N3.4 billion compared to N10.9 billion a year ago. Furthermore, Earnings per share meaningfully grew to N10.62 in FY23 from N6.02 in the prior year.
   
• During the year, Stanbic Bank witnessed growth across all its segments. The Net loans and advances provided by Stanbic significantly grew by 68.9% YoY to N2,041.0 billion, driven by 85.6% YoY growth in loans provided by the Corporate and Investment Banking segment, a 44.6% YoY growth in Personal and Private Banking (PPB) segment, and 34.7% YoY increase in Business & Commercial (BCC) segment.
   
• Stanbic also posted strong quarterly performance, with 4Q23 gross earnings rising 59.2% YoY to N127.5 billion. Net Interest Income increased by 63.4% YoY to N54.7 billion, compared to N33.5 billion in 4Q22. Moreover, Non-Interest Revenue increased 14.3% YoY to N38.0 billion from N33.3 billion in 4Q22. Profit for the quarter jumped 19.3% YoY to N31.4 billion, compared to N26.3 billion in 4Q22.
   
• The directors recommended a final dividend of N2.20 per share (December 31, 2022: N2.00 per share) for the year ended December 31, 2023, with a record date of April 19, 2024. This was in addition to the Interim Dividend of N1.50 paid in September 2023, thus bringing the total FY23 dividend to N3.70. (FY22: N2.0)
   
• In January 2024, Stanbic IBTC Holdings PLC made strategic appointments to the board of its subsidiaries. Mrs. Busola Jejelowo, with over two decades of experience in capital markets and investment banking, was announced as a Non-Executive Director on the Board of Stanbic IBTC Stockbrokers Limited. Mr. Oladele Sotubo assumed the role of Chief Executive at Stanbic IBTC Capital Limited, with experience in corporate finance advisory, debt solutions, and equities trading. Mrs. Yinka Johnson, with experience in portfolio management, product development, and distribution, was appointed Executive Director at Stanbic IBTC Asset Management Limited. Mrs. Olufunke Isichei joined the Board of ZEST Payments Limited as a Non-Executive Director.

Market Reaction: The investor reaction to the FY23 performance was muted as Stanbic IBTC stock closed flat at N54.00, versus a 0.29% decline for the All-Share Index on 5/4.

Stanbic Earnings Highlight FY23

Source: Company Financials, FSDH