Stanbic IBTC improves in major metrics amidst management change

Stanbic IBTC Holdings Plc recently released its numbers for the 2016 financial year, showing an improvement across major metrics, even as that Group reshuffled its senior management team in January 2017.

The management change lead to the resignation of  Mrs Sola David-Borha as the Chief Executive Officer (CEO) and the appointment of  Mr Yinka Sanni (Erstwhile CEO of Stanbic IBTC Bank), with further announcements made on the resignation of long-term chairman Mr Atedo Peterside in March 2017. Post Financial Reporting Council (FRC) of Nigeria tussle and management reshuffle, market analysts said they are optimistic on the performance of the Group in 2017 as it continues to command a diversified revenue base across commercial, retail, wealth management, corporate and investment banking segments of the financial services sector.

Accordingly, Robert Omotunde-led team of analysts at Afrinvest said they updated their assumptions and based on “our blend of valuation methodologies arrived at a 12 months target price of N18.66.” This according to them represents a 5.4 per cent upside when compared to current market price of N17.70 (23/03/2017).

The Group recorded an 11.7 per cent rise in gross earnings from N140.0 billion in Financial Year 2015 to N156.4 billion in Financial Year 2016, driven by 5.8 per cent and 20.1 per cent growth in Interest Income and Non-interest income respectively.

Profit After Tax (PAT) also came in higher at N28.5 billion, a 51.0 per cent year-on-year (Y-o-Y) improvement from N18.9 billion recorded in 2015. The Bank subsequently proposed a dividend of N0.05, implying a dividend yield of 0.3per cent. The Group’s interest income (up, 5.8 per cent to N87.5 billion)  was buoyed by the 53.8 per cent  expansion in interest income on investments (from N20.4 billion to N31.6 billion) which offset the impact of the decline in interest on loans advances to banks and interest on loans and advances to customers which dipped 53.1 per cent and 8.1 per cent respectively in Financial year, 2016. On the other hand, Stanbic’s interest expense declined 23.7 per cent to N29.6 billionn from N38.8 billion, due to a 27.2 per cent drop in interest expense on term deposits.