October 28, 2024/CSL Research

Stanbic’s 9M 2024 unaudited numbers showed a 130.7%y/y increase in Interest Income to N425.8bn driven by an increase in lending activities and improved interest margins. Q/q, Interest Income was up 37.9% in Q3. Net Loans to customers grew 16.2% in 9M 2024 compared with the December 2023 position (inclusive of the impact of the devaluation on foreign currency loans). Interest Expense also grew strongly, up 171.4% y/y to N173.9bn. Customers Deposits were up 50.3% in 9M 2024 compared with December 2023 (also inclusive of the impact of devaluation on foreign currency deposits). Deposit mix improved to 81% (December 2023: 72%) of current-and-savings-accounts deposits to total deposits. Overall, Net Interest Income grew 109.0% y/y to N251.9bn in 9M 2024.

STANBIC IBTC 9M 2O24

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Source: Company’s Financials, CSL Research.

Net Fee and Commission was up 56.7% y/y mainly driven by increase in custody transactions fee, Asset management fees coupled with increase in brokerage and financial advisory transactions. Q/q Net Fee and Commission Income grew marginally by 1.0%

Other income, comprising income from life insurance activities, trading revenue, and other revenue, rose by 43.1% year-on-year to N89.4 billion. This growth was primarily driven by a 34.3% increase in trading revenue from fixed income and currency transactions, reaching N80.3 billion, along with a substantial 162.2% rise in other revenue, which totalled N10.3 billion for the first nine months of 2024.

The group reported Impairment Charge of N59.4bn in 9M 2024, 496.4% higher than N9.96bn reported in 9M 2023 bringing 9M 2024 annualised Cost of Risk (COR) to 3.5%. Non-performing loan to total loan ratio grew to 3.19% compared with 2.35% in December 2023.

Operating Expenses grew 49.2% y/y. The stronger y/y growth in Total Operating Income (+77.5% y/y) compared with the growth in OPEX led to a slight improvement in Cost to Income Ratio (CIR ex provisions) to 39.4% in 9M 2024 from 46.9% in 9M 2023.

The group’s Pre-tax Profit was up 72.2% y/y to N222.9bn in 9M 2024 while Net Profit grew by 67.4% y/y to N182.9bn, bringing 9M 2024 annualised ROAE to 42.9%.

Under segment reporting, Business and Commercial banking reported a Pre-tax Profit of N13.05bn in 9M 2024 compared with Pre-tax Profit of N13.10bn in 9M 2023 while Corporate and Investment Banking reported Pre-tax profit of N152.5bn in 9M 2024 compared with N79.6bn in 9M 2023. The Personal & Private banking business reported Pre-tax Profit of N3.8bn in 9M 2024 compared with a Pre-tax Loss of N2.6bn in 9M 2023. Finally, the Insurance and Assets Management business reported Pre-tax Profit of N53.6bn in 9M 2024 compared with N39.4bn in 9M 2023.

During the period, the Group maintained a strong capital position, with a total capital adequacy ratio of 15.7% (Bank: 13.5%), exceeding the minimum regulatory requirement of 11%.

We have a BUY recommendation on Stanbic. Current price: N61/s. Our estimates are under review.

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​​​​​​​​​​​​​Stanbic IBTC Holdings 9M 2024 Earnings Quick take.pdf​