…Ranks among the top five lenders in Nigeria.
Stanbic IBTC Holdings Plc’s full year earnings have grown double digit on the back of an increase in interest rate on loans and growth in yield from investments.
For the year ended December 2016, Stanbic IBTC Holdings’ net income spiked by 50.97 percent to N28.52 billion from N18.89 billion the previous year.
Gross earnings followed the same growth trajectory as it moved by 11.71 percent to N156.42 billion.
Earnings got a boost from a 17 percent increase in interest income to N87.46 billion.
Stanbic IBTC’s consistent growth at the top and bottom line amid a tough operating environment has attracted investors to its shares as the lender is the best performing bank stock in 2017.
Its share price has rallied 23 percent since the beginning of the year to close at N17.70 as of Wednesday.
Stanbic IBTC has a market capitalization of N177 billion on the floor of the NSE.
The implication of the surge in stock is that the lender is among the top five banks in Africa’s most populous nation.
Stanbic IBTC trades more than one time book value or its price to book ratio (PBR) of 1.30 times earnings is second to GTBank’s PBR of 1.54 times earnings.
The Nigerian lender’s gross loans to advances to customers declined by 3.17 percent to N368.23 billion in December 2016 as against N380.30 billion as at December 2015.
The slow growth is as a result of slow economic activities which has impacted business decisions. The decline QoQ is on the back of some liquidated loans, according to a recent statement by the bank.
“The recent directive by the CBN on granting foreign currency loans to non-foreign currency generating companies impacted some customers whose revenues were dollar indexed especially those in the commercial property sector,” said the Stanbic IBTC.
While Stanbic IBTC’s loans shrank, tier one lenders however have had loan growth boosted by a weak currency.
Zenith Bank, GTBank and Access Bank (the only names to have released Full Year 2016 results) recorded a combined gross loans and advances to customers of N5.68 trillion, which represents a 20.33 percent increase from N4.72 trillion recorded as at December 2015.
Meanwhile the combined loans to deposit ratio moved to 72.36 percent in December 2016 as against 69.16 percent the previous year.
Analysts are of the view that a further weakness of the naira could see foreign currency denominated assets balloon (in naira terms) but they never stated the effects of such a spike on balance sheet.
The central bank in June last year adopted a flexible exchange rate regime that saw the naira lose 40 percent of its value against the U.S dollars.
The Apex bank had clutched unto a currency peg and capital controls in order to curb inflation and stop the continued depletion of the external reserve due to a sharp drop in the price of oil.
BALA AUGIE
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