Stanbic IBTC sees 80% surge in pre-tax profit, analysts highlight growth

Stanbic IBTC Holdings Plc has announced a stellar financial performance for the second quarter of 2024, with pre-tax profits soaring by an impressive 80.4 per cent to N84.2 billion, marking the highest quarterly profit in the company’s history.

For the first half of 2024, Stanbic IBTC’s pre-tax profit reached N147 billion, a significant leap from the N82.9 billion recorded in the same period in 2023.

With these figures, the bank is on track to achieve a milestone of N200 billion in pre-tax profit by the end of the year, underscoring its strong financial trajectory.

The bank also reported a 30.3 per cent rise in loans and advances, totaling N2.17 trillion, and a 24.9 per cent increase in total deposits, which now stand at N2.89 trillion.

The bank’s total assets grew by 37.1 per cent to N6.1 trillion, while net assets saw a 29.6 per cent rise to N584.5 billion. Earnings per share (EPS) improved from N3.5 in the previous year to N6.4.

The performance was primarily driven by a surge in interest income from loans and advances to customers, which nearly doubled from N91.1 billion in the first half of 2023 to N183.1 billion in the same period this year.

Additionally, interest income from investments saw a significant rise, increasing from N16.7 billion to N56.1 billion, benefiting from the higher interest rate environment.

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The bank also experienced a substantial boost in commission and fee income, which rose to N82.9 billion in the first half of 2024 compared to N51.1 billion in the previous year.

Notably, this includes N47.2 billion earned from asset management fees and N11.7 billion from brokerage and financial advisory fees, highlighting the bank’s successful expansion into diversified income streams.

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Financial analysts praised Stanbic IBTC’s strategic focus on high-yield income sources, particularly in the context of Nigeria’s current economic climate.

Bola Kale, an analyst at Chapel Hill Denham, commented, “Stanbic IBTC’s performance is a reflection of its adeptness at leveraging the higher interest rate environment to its advantage.

“The bank’s ability to nearly double its interest income from loans and investments is a testament to its strong asset quality and prudent risk management.”

Tunde Adesoji, a financial expert at Vetiva Capital Management, also noted, “The surge in fee income, particularly from asset management and brokerage services, indicates a well-rounded growth strategy that goes beyond traditional banking operations.

“Stanbic IBTC is clearly positioning itself as a comprehensive financial services provider, which is crucial for sustaining long-term profitability.”

Stanbic IBTC’s shares responded positively to the announcement, closing at N58.95 per share, up 3.6 per cent in mid-day trading.