Weak Earnings Down Stanbic IBTC Holdings Profit by 40% in 9 Months
With about 20 per cent drop in gross earnings, Stanbic IBTC Holdings Plc has announced 40 per cent drop in profit in its nine months ended September 30, 2021 unaudited result and accounts.
The company’s result made available by the Nigerian Exchange Limited (NGX) showed a Profit after tax of N39.9 billion in nine months of 2021 from N66.2 billion reported in nine months of 2020.
Also, Profit before tax closed nine months of 2021 at N45.3 billion, down by 41 per cent from N76.9 billion reported in prior nine months unaudited results.
Gross earnings and hike in operating expenses contributed to the Holdings decline performance in the period. Gross earnings dropped to N146.6billion in nine months of 2021 from N183.3billion reported in in nine months of 2020.
Also, the group’s total operating expenses rose by 12 per cent to N79.35billion in nine months of 2021 from N70.85billion reported in prior period, while total operating income rose by 20 per cent to N123.2 billion from N154.7 billion reported in nine months of 2020.
The interplay between operating income and expenses drove cost to income ratio to 64.4 in nine months of 2021 from 45.8 per cent reported in nine months of 2020.
Commenting on the results, Chief Executive Stanbic IBTC, Dr Demola Sogunle said: “We saw further improvement in key income lines in the third quarter when compared with the second quarter. Both net interest income and non-interest revenue grew quarter-on-quarter (QoQ) driven by increases in interest income and trading revenue while operating expenses moderated due largely to absence of the AMCON levy recognition in Q3 2021.
“The increase in interest income arose from increase in volume and average yield of loans and investments. Trading revenue growth, on the other hand, resulted from the increase in volume of trading activities.
“Customer loans continued to grow in line with trend from the prior quarters and grew further by eight per cent QoQ as we continued to support our clients. This was funded by growth in customer deposits, which increased by 14per cent QoQ, thereby exceeding the N1.0 trillion mark.
“We mentioned during our last results’ conference call, that the Group is undergoing a future-ready transformation, that is, transitioning from a product/service focus to a Client Segment led organization effective August 2021. Accordingly, we present to you our very first set of financial results reported in line with this new structure.”
He added, “Our new segments include Wholesale Clients (formerly known as Corporate and Investment Banking); Consumer and High Net worth Clients (formerly known as Personal Banking (PB) with the inclusion of Wealth and Investment Customers; and Business and Commercial Clients (formerly known as Business Banking). The Wholesale Clients segment is responsible for managing large-scale corporate relationships. The Consumer and High Net Worth Clients Segment is responsible for managing consumer, affluent client relationships and the service channels through which we reach these clients while the Business and Commercial Clients Segment is responsible for managing business-to-business relationships as well as related service channels.
“Thus, in line with our core value of delivering value to our shareholders, the restructuring will advance the execution of our digital business transformation and enable us to achieve accelerated future readiness for the business and growth through effective mining of the client ecosystems propelled by a future-ready workforce. We continue to make progress in supporting the financial needs of our communities in Q3 2021, investing to advance tree planting exercise, youth and women empowerment through donations, sponsorships and partnerships, library upgrade and renovation, hospital unit refurbishment, amongst others.
“Net Zero Emissions webinar was held in Q3 2021 during our Sustainability Week. The webinar was aimed at advancing awareness around carbon emissions and achieving net zero emissions. We are committed to growing the core of our businesses over the rest of the year and making progress towards delivering on our FY 2021 Guidance”
From financial assets position, the group report a total assets increase of 11 per cent to N2.749 trillion from N2.486 trillion reported in full year ended December 31, 2020.
The group Non-performing loans increased by eight per cent to N28.7 billion from N26.5 billion reported in last year full results.