Q1 2021: Stanbic IBTC Holdings reports 50% drop in PBT
By Kayode Tokede
Stanbic IBTC Holdings Plc has reported 50 per cent decline in profit before tax to N12.1billion in first quarter (Q1) results for period ended March 31, 2021 from N24.2billion reported in first quarter ended March 31, 2020 results.
The unaudited results released on the Nigerian Exchange Limited (NGX) on Friday disclosed 45 per cent drop in profit after tax from N20.6 billion in Q1 2020 from N11.3 billion reported in Q1 2021.
The Q1 2021 results showed Gross earnings of decline of 26 per cent to N45.7 billion from N61.4 billion reported in Q1 2020.
The group reported Net interest income of N15.9 billion, down 14per cent from N18.5 billion in Q1 2020 while Non-interest revenue closed Q1 2021 at N23.1 billion, down 29per cent from N32.6 billion reported in Q1 2020.
Commenting on the results, Chief Executive Stanbic IBTC, Dr. Demola Sogunle said, “The domestic economy remains quite fragile.
“Negative real returns prevailed in the first quarter as headline inflation continued on the rise, currently above 18per cent as of March 2021.
“Economic activities are expected to improve as the authorities take on appropriate actions and business confidence improves.
“Just recently, in April 2021, the CBN resumed dollar sales to foreign portfolio investors for the first time since December 2020 to clear the backlog of foreign exchange demand.
“The Group’s profitability in the first quarter moderated year-on-year due to pressure on trading income: trading activities in our Global Markets business slowed down compared to prior year, operating expenses from regulatory induced charges increased, as well as the continued pressure on risk asset yields.
“The decline was partly cushioned by the year-on-year improvement in net fee and commission revenue as well as impairment write back of N155 million in Q1 2021 compared to the charge of N1.97 billion in prior year. The impairment writeback was due to releases and after write-off recoveries achieved during the quarter.
“Again, the diversity of our earnings proved supportive during the period. Wealth’s profitability improved from prior period and provided succour for the contraction in profitability of the Corporate and Investment Banking and the Personal and Business Banking businesses.
“That said, gross customer loans continued to grow, increasing by 16 per cent from the December 2020 position. The continued loan growth would support margin accretion and ultimately compensate for the pressure on yields.
“Customer deposits also increased by six per cent from the December 2020 position, most of the growth arose from cheap deposits and resulted in further improvement in the CASA ratio to 83.3 per cent (FY 2020: 82.8 per cent), which was positive for our funding costs. Our capital and liquidity positions remained robust in Q1 2021.
“Our latest addition, Stanbic IBTC Insurance Limited commenced full operations during the quarter. Our Pension business introduced the Loyalty program, UMatter, to appreciate our esteemed clients. Our Asset Management business launched the Stanbic IBTC Enhanced Short-Term Fixed Income Fund which invests in short term bonds issued by the Government and corporate entities.
“We are committed to achieving our Full Year 2021 Guidance.”
