STANBIC IBTC HOLDINGS PLC FY'22 (Unaudited) Earnings Release - Recovery complete with 44% y/y profit growth
| STANBIC’s unaudited FY’22 results were impressive. The banking group posted a 39% y/y increase in Gross Earnings to ₦288 billion, above our estimate of ₦271 billion. This came as the result of a 46% y/y increase in Interest Income to ₦153 billion (Vetiva: ₦141 billion), as the bank’s yield on assets improved to 7.1% from 5.7% in FY’21, while its balance sheet grew 11% y/y. Meanwhile, Non-Interest Revenue (NIR) also supported growth, with the bank reporting a 33% y/y improvement to ₦127 billion; this was driven by significant improvements in trading revenue, specifically fixed income, and currency trading, which almost tripled y/y to ₦35 billion amid higher Fixed Income yields. | |||||
| Q4 performance driven by CBN policies In the final quarter of 2022, STANBIC outperformed the corresponding period in 2021 by almost double across the income statement. Thanks to the hikes in MPR, the bank reported a 76% y/y increase in Interest Income to ₦80 billion, 11% higher than Q3’22. However, the rise in the minimum savings rate also caused Interest Expenses to go up 136% y/y and 28% q/q to ₦12 billion, meaning Net Interest Income came in 158% higher y/y and 50% q/q at ₦41 billion. |
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| Interestingly, the bank only added 3% to its balance sheet in the final quarter, closing the year at ₦3.0 trillion, as a 6% rise in loans and advances was countered by a 6% fall in T-bills and Bonds. On the other hand, Deposits jumped by 9% q/q and 10% y/y as a result of the CBN’s Naira policy, while borrowings went up 41% y/y and 9% q/q, spurring the higher interest payout seen during the period. Most notably, although the bank’s NPLs grew 45% y/y to ₦29 billion, the figure actually declined 3% q/q, with the NPL ratio closing the year at 2.4% (FY’21: 2.1%). In 2023, we anticipate that the same policies by the CBN, namely the MPC’s hawkish interest rate stance and the Naira exchange, will influence the performance of the bank’s NII in the first and second quarters at least. |
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