STANBIC IBTC HOLDINGS PLC H1'21 Earnings Release - Profits down 50% y/y amid weaker NIR, Yield on Assets

STANBIC released its H1’21 earnings yesterday, reporting a 26% y/y decline in Gross Earnings to ₦94 billion. As in Q1, earnings remained depressed y/y, caused by weaker yield on assets. Although, Interest Income grew by 7% q/q to ₦17 billion, it was 12% lower for the H1 period in comparison to 2020. Once again, this was due to lower income from investment securities, which remained flat q/q and came in 55% lower y/y. On the other hand, Interest Expense went up 20% q/q to ₦6 billion but was still down 35% y/y at ₦11 billion for Net Interest Income of ₦17 billion (+7% q/q) for Q2 and ₦33 billion (-12% y/y) for H1.

Meanwhile, Non-Interest Revenue (NIR) remained flat q/q at ₦25 billion, meaning the bank reported a 31% y/y decline for H1 at ₦49 billion. Overall, the bank’s fees and commissions was the only line item to show improvement y/y, rising by 22% to ₦45 billion, driven by a 20% y/y rise in Asset Management fees.

 Cost-wise, the bank continued to report net positive loan loss provisions, printing at ₦1 billion for the H1 period as impairments fell by 76% y/y, while writebacks remained flat. However, Operating expenses went up by 17% y/y to ₦59 billion, driven by a 32% increase in AMCON charges, which have been fully recognized in the first half of the year. This led to a 53% y/y drop in PBT to ₦24 billion and PAT of ₦22 billion, 50% lower y/y with an ROAE of 12.6% (H1’20: 27.3%). The bank also proposed an interim dividend payment of ₦1.00/share (H1’20: ₦0.40/share).