FSDH Initial Reaction: Stanbic IBTC 1Q24 results 
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April 26, 2024/FSDH Research

Key Performance Highlights:

• Stanbic Bank’s 1Q24 total Income significantly increased 70.7% YoY to N138.2 billion, compared to N81.0 billion in 1Q23. This growth was primarily attributable to higher Net Interest Income (up 111.4% YoY) and Net Fee & Commission Revenue (up 67.2% YoY). The Business & Commercial segment revenue surged 87.2% YoY to N26.1 billion in 1Q24, followed by a 64.6% YoY jump in Corporate and Investment Banking revenues and a 46.1% YoY rise in the Personal and Private Banking (PPB) segment. The bank’s Gross Earnings significantly increased 84.7% YoY to N179.9 billion during 1Q24, driven by higher Interest Income (up 129.7% YoY) and Fee and Commission revenue (up 71.3% YoY).
   
• The Bank’s Interest Income improved substantially by 129.7% YoY in 1Q24, reaching N115.8 billion mainly due to increased Interest on loans and advances to customers and investments. Interest expense also increased 177.1% YoY to N38.9 billion, mainly because of higher borrowed funds. Consequently, Net Interest Income more than doubled to N76.9 billion in 1Q24 from N36.4 billion in 1Q23. Further, the 71.3% YoY rise in Fee and Commission revenues to N44.6 billion due to higher asset management fees and brokerage & advisory fees was partly offset by increased Fee and Commission expense of N2.8 billion. Net Fee and Commission revenue increased 67.2% YoY to N41.7 billion in 1Q24.
   
• Stanbic Bank reported an N546 million loss from life insurance activities in 1Q24, compared to N409 million in 1Q23, mainly due to higher Net insurance finance expenses. Moreover, in 1Q24, Trading revenue declined 11.7% YoY to N17.6 billion, while Other revenue increased to N2.6 billion Vs. N197 million in 1Q23. Stanbic Bank’s Non-interest revenue also increased 37.5% YoY to N61.3 billion in 1Q24. Net impairment loss on financial assets increased to 7.1 billion in 1Q24 from N3.2 billion in 1Q23.
   
• Stanbic’s Staff costs increased 52.0% YoY to N21.2 billion in 1Q24, while Other operating expenses increased to N47.2 billion, up 71.7% YoY, reflected majorly by higher AMCON expenses and Information technology expenses. Consequently, Operating Expenses increased 65.1% YoY to N68.4 billion in 1Q24. Despite the 130.8% YoY higher Tax expense (N17.1 billion), Profit for the year jumped 58.1% YoY to N45.6 billion in 1Q24. Additionally, EPS also increased to N3.45 in 1Q24 from N2.16 in 1Q23. The Corporate and Investment Banking segment’s Profit shot up 72.4% YoY in 1Q24 to N30.4 billion, followed by a 42.0% YoY rise in Personal and Private Banking (PPB) segment to N10.0 billion and a 25.3% YoY increase in Business & Commercial (BCC) segment to N5.3 billion.
   
• Note that Gross Loans and Advances increased 7.2% YoY to N2,241.6 billion. Loans and Advances from Business & Commercial (BCC) increased 34.3% YoY to N605.0 billion, followed by the Personal and Private Banking (PPB) segment, increasing 14.2% YoY to N147.3 billion, while loans and advances from Corporate and Investment Banking declined 1.5% YoY to N1489.2billion. Looking at sequential performance, Gross Earnings increased 41.2% QoQ to N179.9 billion, while Total Income increased 49.1% QoQ to N138.2 billion. Profit for the year increased 45.5% QoQ to N45.6 billion.

Market Reaction: The investor reaction to the 1Q24 performance was buoyant as Stanbic IBTC stock jumped 10.0% to close at N49.50, versus a 0.02% marginall fall for the All-Share Index on 26/4.

Stanbic Earnings Highlight 1Q24

Source: Company Financials, FSDH