STANBIC: Robust interest income propels PAT expansion

Stanbic IBTC Holdings Plc (NGSE: STANBIC), in its H1'24 audited financial results, reported a 71.3% growth in PAT to N116.4 billion. This impressive performance was mainly driven by a 2.2x surge in interest income, which offset the 91.2% growth in interest expense. Interest income and interest expense printed at N246.1 billion and N71.8 billion, respectively, resulting in a net interest income of N174.3 billion. Elsewhere, non-interest revenue (NIR) expanded by 31.0%, primarily driven by growths recorded in asset management fees (+41.6%) and brokerage & financial advisory fees (+144.4%).

Following the combined improvement in NII & NIR, operating income came in higher (+77.1%) and masked the 57.8% rise in operating expenses, which resulted in the 5.3ppts moderation of STANBIC's cost-to-income ratio (CIR) to 42.8%. The main contributors to the higher operating expenses were staff costs (+46.0%), AMCON expenses (+70.9%), and information technology (+110.9%).

STANBIC recorded a 32.6% increase in gross loans and advances to N2.3 trillion. A breakdown indicates that non-performing loans expanded by 114.3% to N81.6 billion, translating to an NPL ratio of 3.6% (vs. 2.2% in H1'23). In tandem with the substantial growth in gross loans, loan provisioning likewise improved, with cost-of-risk advancing to 2.4% (vs. 0.8% in H1'24).

The H1'24 result translated to an annualised EPS of N18.0 (vs N10.5 in H1'23), with annualised ROAA and ROAE of 4.1% (H1'23: 3.6%) and 42.6% (H1'23: 31.6%), respectively.

In addition, the bank announced an interim dividend of N2.0 per share (vs N1.5 in H1'23), which translates to a yield of 3.4% based on the stock's last market close.

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