Background
Stanbic IBTC Holding Plc is a full service financial services group with a clear focus on three main business pillars-corporate and investment banking, personal and business banking and business banking and wealth management.
Stanbic IBTC was formed following the 2007 merger of Standard Bank’s Nigeria operations and IBTC Chartered Bank Plc.
The bank hold a universal banking license and was one of the banks to adopt the holding company structure in 2012 following the recent CBN regulation on non- core subsidiaries.
The bank has 174 branches across Nigeria. Stanbic IBTC has total shares outstanding of 10 billion and shareholder funds of N97.63 billion as at December 31, 2013.
Financial Results for 2013
Stanbic IBTC released results showed the bank weathering the regulatory headwinds as top line growth was translated into an impressive bottom line performance.
For the year ended December 31, 2013 the bank grew gross earnings by 21.08 percent year on year to N111.23 billion from N91.86 billion in the corresponding period of 2012.
Profit before tax (PBT) for the year ended December 2013 soared by 115.71 percent y/y to N24.62 billion compared with N11.42 billion as at FY12.
Interest income grew by 8.24 percent y/y to N62.59 billion in 2013 compared with N57.82 billion as at FY2013, while interest expense jumped marginally by 5.39 percent to N25.57 billion in the review period.
Earnings per share (EPS) grew by 272 percent to 186k in FY13 from 50k as at FY12.
This is an impressive performance given that the CBN tightening policy has been stifling, the growth potentials of banks in Nigeria.
Net interest expense for the year ended December 2013 climbed by 10.31 percent y/y to N37.01 billion from N33.55 billion in 2012, while loan loss expense increased by 61.31 percent y/y to N2.67 billion in the review period.
The expansion in bottom line performance was also fuelled by a 42.42 percent surge in non-interest income to N48.22 billion in Fy13 as against N33.86 billion in 2012.
Net margin a measure of profitability and efficiency jumped to 18.67 percent in 12M13 from 11.06 percent in 12M12.
Return on Average Assets (ROAA) spiked to 22.67 percent in FY13 compared to 11.80 percent in 2012, while Return on Average Equity (ROAE) surged to 2.89 percent from 1.50 percent in 2012.
Total operating expenses ratio rose by 18.01 percent to N57.95 billion compared to N49.10 billion in 2012, while operating expense ratio spiked to 76.62 in 12M13 from 53.45 percent in 12M12.
Cost to income and cost of funds in the review period were 67.99 percent and 5.30 percent respectively.
The stellar results show the high dependence on corporate banking as opposed to commercial banking where the focus will be to grow risk assets in order to grow interest income.
Total loans and advances were up by 32 percent y/y to N383.93 billion in FY13 as against N290.91 billion as at FY12.
Total deposit by customers climbed by 22.50 percent y/y to N468.04 billion in12M13 compared to N382.05 billion in 12M12.
Loans to deposit ratio for the year ended December 2013(FY13) increased to 82.03 percent from 76.14 percent in the same period of the prior year (FY12).
Stanbic’s total assets were up by 12.74 percent y/y to N763.05 billion in FY13 as against N676.82 billion as at 2013FY.
The share holders of the bank have had their value maximized as the share price has increased by 63.5 percent in the past year to close at N20.45 on 11, April 2014 on the floor of the Nigeria Stock Exchange (NSE).
Total market capitalization was N204.50 billion on the same day.
The bank has the opportunity to tap into the growing Nigeria economy as the economy is expected to expand by 300 basis point to 7percent in 2014 from 6.7 percent in 2013 according to First Bank Capital an investment and research firm in a note released in January 2014.
BALA AUGIE
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