Stanbic IBTC Holdings recently released its financial statements for the year ended December 2017. Gross earnings increased by 35.81% from ₦156 billion in 2016 to ₦212 billion in 2017. Profit before tax increased by 64.38% from ₦37.2 billion in 2016 to ₦61.1 billion in 2017. Profit after tax also increased by 69.4% from ₦28.5 billion in 2016 to ₦48.3 billion in 2017.
Earnings per share moved from ₦2.46 in 2016 to ₦4.60 in 2017.
Stanbic IBTC Holdings declared an interim dividend of ₦0.50 per share. It had earlier declared an interim dividend of ₦0.60 per share. The total dividend paid thus amounted to ₦1.10 or a 23.9% pay-out ratio. This seems rather low compared to other banks such as GT and Zenith which typically pay close to 50% of their earnings as dividends.
The Holding Company may have taken this step in order to conserve capital. Stanbic IBTC’s (the bank) Capital Adequacy Ratio dropped slightly from 21% in 2016 to 20.5% in 2017.
Stanbic also gave shareholders the option of converting their dividend payments into shares. Some shareholders thus opted for 49.4 million additional shares in lieu of dividends.
Interest income up significantly
Interest income went up massively, moving from ₦87 billion in 2016 to ₦122 billion in 2017. This was largely driven by interest from investments. Interest on investments moved up from ₦31 billion in 2016 to ₦59 billion in 2017.
Fee and commission revenue
Net fee and commission revenue increased marginally from ₦52.9 billion in 2016 to ₦59.4 billion in 2017. This was largely dominated by asset management fees comprising ₦33.9 billion. Account transaction fees also fell sharply from ₦7.1 billion in 2016 to ₦3.6 billion in 2017.
Trading Income spiked
Trading income was up by nearly 100% from ₦15 billion in 2016 to ₦29 billion in 2017. The rise was largely driven by the increase in trading revenue from foreign exchange and fixed income. Revenue from fixed income trading moved from ₦5.5 billion in 2016 to ₦18 billion in 2017. Revenue from trading of foreign exchange also jumped from ₦6.2 billion in 2016 to ₦11 billion in 2017.
Stanbic Ibtc (the bank) made a whopping ₦28 billion as other income from its subsidiaries. The bulk of this income came from Stanbic Ibtc Pension Managers which paid 20.9 billion as dividends.
The personal and business banking segment has maintained a second consecutive year of losses. Losses increased from ₦1.6 billion in 2016 to ₦16.5 billion in 2017. Income from Corporate and Investment banking rose impressively from ₦14.9 billion in 2016 to ₦45.7 billion in 2017. Wealth income increased from ₦15.2 billion in 2016 to ₦19.1 billion in 2017.
Impairment charges also went up
Impairment charges went up significantly from ₦19.8 billion in 2016 to ₦25.5 billion in 2017. Stanbic, however, recovered ₦2.4 billion on loans and advances that had previously been written off.Specific impairments increased from ₦11.2 billion in 2016 to ₦20.9 billion in 2017.
Stanbic appears to have taken impairment provisions largely on communication, manufacturing and oil and gas loan portfolios. Communications accounted for ₦8.5 billion of Stanbic’s total non-performing loan of ₦31 billion. The bank made impairment charges on this segment of ₦6.7 billion. Stanbic IBTC may have thus taken a huge haircut on its loan to Etisalat (now known as 9Mobile).
Stanbic also made specific impairments of ₦3.9 billion on the ₦7.3 billion impaired loans to the oil and gas sector.
Stanbic IBTC Holdings is a member of the Standard Bank Group, which holds a 53.07% equity holding (through Stanbic Africa Holdings Limited). The principal activity of the company is to carry on business as a financial holding company, to invest and hold controlling shares in, as well as manage equity in its subsidiary companies.
The company has nine direct subsidiaries, namely: Stanbic IBTC Bank PLC, Stanbic IBTC Pension Managers Limited,Stanbic IBTC Asset Management Limited, Stanbic IBTC Capital Limited, Stanbic IBTC Investments Limited, Stanbic IBTCStockbrokers Limited, Stanbic IBTC Ventures Limited, Stanbic IBTC Insurance Brokers Limited and Stanbic IBTC Trustees Limited.