Stanbic IBTC Holdings has surpassed N1 trillion in market value, according to data from the Nigerian Exchange. The financial services boutique has been experiencing increased demand for its share in recent times following a 100% surge in return on equity in the first six months of 2023.
Apparently, equities investors go on a buying spree due to the group’s good earnings performance numbers, healthy balance sheet and strong support from the parent company.
Due to heavy positioning by value hunters in the stock market, its share price has become one of the most expensive, traded at N79 on Friday. The Nigerian Exchange valued the group’s 12.956 billion outstanding shares were valued at N1.010 trillion.
The financial services holdings reported more than 121.6% year-on-year growth in profitability in the first half of 2023 to N67.979 billion from N30.669 billion in the comparable period.
Supported by a healthy growth in net income, Stanbic IBTC’s return on equity rose by 100.28% in the first half to N15.07 from N7.52 12 months earlier. Demonstrating a better use of assets, the group’s return on assets jumped by 50.84% to N1.53 from N1.01 in the comparable period.
Its improved bottom line was supported by increased revenue from trading activities, non-interest revenue and higher earnings from interest-yielding assets. Due to its strong earnings performance, its board of directors declared an interim dividend of N1.50 following an upbeat earnings performance.
This was the same amount paid in the equivalent period in 2022. Its audited numbers showed a 61.6% year-on-year increase in Interest Income to N110.3 billion driven by improved yields on risk assets. In the same vein, Interest Expense also grew strongly, up by 110% year on year to N37.6 billion.
The financial services recorded a 12.3% growth in net fees and commission, driven by a 17.9% growth in asset management fees to N33.4 billion in H1 2023. Other Income also grew significantly, up 172.9% year on year. The growth in Other Income was due to a 174.0% y/y growth in trading revenue on fixed income.
The group reported an impairment charge of N5.98bn in H1 2023, representing 9.4% higher than N5.47 billion reported in H1 2022. Its non-performing loan ratio was 2.34% in H1 2023 compared with 2.38% in December 2022. Operating Expenses grew moderately, up by 21.3% year-on-year improvement in Cost to Income Ratio to 48.1% in H1 2023 from 59.9% in H1 2022.
The group’s Pre-tax Profit was up 107.6% year on year to N83 billion in H1 2023 while Net Profit grew by 121.5% year on year to N67.92 billion, bringing H1 2023 Return on Equity (ROE) to 15.07%.