STANBIC: NII & NIR drives Q1'24 earnings

STANBIC IBTC Holdings Plc (NGSE: STANBIC"”BUY: N72.70), in its Q1'24 unaudited results reported a 58.1% growth YoY in PAT to N45.6 billion with an EPS of N3.5. Earnings showed solid growth on both revenue streams: interest income (+129.7% to N115.8 billion) and non-interest revenue (+37.5% to N61.3 billion). Consequently, the gross earnings grew by 135.8% to N117.1 billion.

Net interest income (NII) was robust, appreciating by 111.4% YoY to N76.9 billion. This was driven by a strong interest income, up by 129.7% YoY to N115.8 billion, following an improvement in asset yields, masking the 177.1% increase in interest expense. The earnings print was also supported by the 37.5% YoY increase in non-interest revenue (NIR) to N61.3 billion. This was on the back of higher net fees & commission revenue of N41.7 billion which was predominantly driven by higher asset management fees of N23.9 billion. It is however noteworthy that trading revenue declined by 11.7% YoY to N17.6 billion in its fixed income and currencies investments, in the period under review. Nonetheless, operating income came in stronger (+70.6% YoY) at N138.2 billion, offsetting the growth in OPEX (N68.4 billion), leading to a 1.68ppts decline in the cost-to-income ratio (CIR) to 49.5%.

Elsewhere, the bank recorded an impairment charge of N7.1 billion (+116.6% YoY) to account for the 85.8% YoY increase in gross loans. Expectedly, cost-of-risk (CoR) edged higher to 1.4% (vs 1.2% in Q1'23). 

In terms of profitability ratios, annualized ROA contracted to 3.1% (vs 3.6% in Q1'23), while annualized ROE expanded to 33.5% (vs 26.4% in Q1'23).

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