March 20, 2023/CSL Research
Stanbic IBTC’s FY 2022 numbers showed a 50.1y/y increase in Net Interest Income to N113.1bn. Q/q, Net Interest Income was up 14.2% (Q4 compared with Q3). The y/y growth in Interest Income was driven by both increase in volume of risk assets and growth in average yield due to a higher interest rate environment. Net Loans to customers were up 30.8% y/y. Interest Expense was up 34.6%y/y to N39.6bn mainly driven by Interest Expense on borrowed funds. Customer Deposits were up 10.6% in FY 2022 compared with December 2021.
| Stanbic IBTC FY 2022, Nm |
Source: Company, CSL Research
Net Fee and Commission Income was up 9.9% y/y but declined marginally in Q4 compared with Q3, down 1.3% q/q. The y/y growth in the Fees and Commission Income was supported mainly by moderate growth in Asset Management Fees (up 6.6%y/y) and accounting for 61% of total Fees and Commission Income as of FY 2022, Card based commission (up 112.2% y/y), and brokerage and financial advisory (up 24.4%).
Other Income (Income from life insurance activities, Trading Revenue and Other Revenue) grew significantly, up 178.7% y/y mainly due to growth in Trading Revenue on fixed Income and currencies, which was up 161.0% to N34.7bn from N13.3bn in 2021. Q/q however, Other Income grew moderately, up 16.9% in Q4 compared with Q3.
The group reported an Impairment Charge of N10.3bn in 2022 compared with a write back of N1.5bn in FY 2021. FY 2022 Cost of Risk comes to 0.94%. Non-performing loan to total loan ratio of 2.4% was reported compared with (December 2021: 2.1%)
Operating Expenses grew 21.4% y/y and 6.8%q/q. The moderate y/y growth in OPEX compared with the significant y/y growth in Total Operating Income (up 40.3% y/y) led to a 839bps improvement in Cost to Income Ratio (CIR ex provisions) to 53.9% in FY 2022 compared with 62.3% for FY 2021.
The group’s Pre-tax Profit was up 52.0% y/y to N100.3bn for FY 2022 while Net Profit grew 41.9% y/y to N80.8bn, bringing FY 2022 ROAE to 20.6% compared with 14.7% for FY 2021.
The group’s Management declared a final dividend of N2.00/s.
Under segment reporting, Business & Commercial banking segment reported PBT of N13.3bn compared with N5.9bn in 2021. Corporate and Investment Banking reported PBT of N57.3bn compared with N26.6bn in 2021 while the consumer and high net worth client segment reported PBT of N29.7bn compared with N33.4bn in FY 2021.
The group reported total capital adequacy ratio of 21.2% (Bank: 16.9%), which is significantly above the 11% (Basel 3) minimum regulatory requirement. The group’s liquidity ratio closed at 85.04%, which is above the regulatory minimum requirement of 30%.
We have a BUY recommendation on Stanbic. Our estimates are under review. Current price: N39.90/s
