The profit of Stanbic IBTC Holdings Plc, a financial institution in Nigeria, rose to the highest in at least 13 years in the first quarter of this year, data compiled by BusinessDay shows.
The holding company’s latest financial statement shows that its after-tax profit grew to N45.6 billion from N28.8 billion in the first quarter of 2023 and its pre-tax profit also increased to N62.7 billion from N36.2 billion.
The member of Standard Bank Group also recorded a 135.8 percent growth in gross earnings to N117.1 billion and its net interest income rose by 111.4 percent to N76.9 billion.
“This was driven by a strong interest income, up by 129.7 percent to N115.8 billion, following an improvement in asset yields, masking the 177.1 percent increase to N28.9 billion in interest expense,” analysts at Cardinalstone Research said in a recent note.
The lender disclosed that net fees and commission revenue were up 67.2 percent to N41.6 billion from N24.9 billion.
The analysts noted that the increased volume of digital banking transactions and investment banking fees mainly drove this increase.
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Stanbic said notwithstanding the 65 percent growth in operating expenses in the first three months, its cost-to-income ratio improved significantly from 49.5 percent in Q1 to 51.2 percent in Q1 last year due to improved top-line performance.
The bank’s basic earnings and diluted per share rose to N3.45 from N2.16 in the reviewed periods.
Total assets increased by 16 percent to N5.97 trillion from N5.14 trillion, largely due to growth in total deposits and the revaluation of foreign currency deposits. At the same time, total liabilities rose to N5.43 billion from N4.62 billion.
Equity attributable to ordinary shareholders increased to N544 billion from N506 billion.
Further analysis of the group’s statement reveals that it recorded an impairment charge of N7.1 billion to account for the 85.8 percent increase in gross loans.
The group’s net cash flows from operating activities increased to N791 billion from N99 billion while net cash flows used in investing activities stood at N50 billion from a negative N117 billion.
Net cash flows used in financing activities stood at N140 billion in the first three months of the year from N8 billion in the same period of last year while cash and cash equivalents rose to N1.4 trillion from N617 billion.
In the first three months, the group’s total capital adequacy ratio closed at 14.6 percent higher than the 11 percent minimum regulatory requirement.
In a statement, Stanbic IBTC Holdings said during its 12th Annual General Meeting on May 16 in Lagos, that the bank’s directors will seek shareholder approval to establish a Debt Issuance Programme of up to N400 billion (or equivalent in foreign currency).
“The purpose is to issue various types of debt securities, including senior unsecured or secured, subordinated, convertible, preferred, equity-linked, or other forms of debt obligations. The issuance may be through public offering, private placement, or other methods, in tranches and at dates, rates, and terms determined by the Directors, subject to regulatory approvals,” the statement said.
