STANBIC IBTC HOLDINGS PLC 9M'19 Earnings - 9M Profits Lag Despite Topline Growth
Weaker recoveries distort y/y earnings improvements
STANBIC released its 9M’19 earnings, posting a 5% y/y increase in Gross Earnings to ₦176.2 billion, with Interest Income improving 4% y/y to ₦91.0 billion. Meanwhile, Interest Expense increased 10% y/y to ₦32.4 billion, outstripping the growth in Interest Income and leading to Net Interest Income of ₦58.7 billion, flat y/y. Elsewhere, Non-Interest Income grew 6% y/y to ₦85.1 billion (Vetiva estimate: ₦86.7 billion), thanks to a 7% growth in Fee Income. Also, the 98% y/y decline in net write-backs from loans to ₦90 million from ₦4.1 billion in the corresponding period of 2018 partly accounted for the bank’s 2% y/y decline in PBT y/y to ₦69.1 billion (Vetiva Estimate: ₦66.7 billion).
Tame Q3 Opex strengthens q/q profit growth
In the third quarter, the bank recorded flat q/q Gross Earnings of ₦58.8 billion (Vetiva estimate: ₦62. 2 billion); this was as a result of a 2% q/q decline in Non-Interest Income to ₦28.5 billion (Vetiva Estimate: ₦30.1 billion) which offset the bank’s 2% q/q improvement in Interest Income to ₦30.3 billion (Vetiva estimate: ₦32.0 billion). However, the bank did record a 14% q/q decline in Opex to ₦21.5 billion, occasioned by a 24% q/q drop in other operating costs.
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