Stanbic IBTC Holdings Plc has reported a 71% increase in its profit after tax for the first half of 2024. From N67.92 billion in the same period last year, the bank’s net profit rose to N116.36 billion this year.
These results were disclosed in the bank’s consolidated and separate statements of profit or loss for the six months ended June 30, 2024, which were recently filed with the Nigerian Exchange Limited.
Key drivers of this growth include a 54% increase in net interest income and a 31% rise in non-interest revenue; a rise from N72.68bn in H1 2023 to N174.30bn. Interest income soared by 123%, while interest expense increased by 91%. The bank attributed the growth in non-interest revenue to higher fee and commission income and other income sources.
In the period under review, Stanbic IBTC also experienced a 91 per cent increase in interest expense, which climbed to N71.83bn from N37.58bn due to higher interest rates and increased borrowings.
Non-interest revenue grew by 31 per cent to N129.15bn, compared to N98.62bn in the previous year, supported by increased fee and commission revenue and other income sources, contributing to the overall revenue enhancement.
The bank’s net impairment losses on financial assets ballooned by 344 per cent to N26.55bn from N5.98bn.
Additionally, operating expenses surged by 58 per cent to N129.89bn from N82.34bn, on the back of higher staff costs and other operational expenditures.
Stanbic IBTC stated that N563bn had been recognised as off-balance sheet pledged assets, representing 30 per cent of the original transaction amount.
A cross-currency interest rate swap agreement with Standard Bank of South Africa Limited, in which the transaction was a part of. Under this agreement, Stanbic IBTC will exchange $1 billion for N1.482 billion with the Central Bank of Nigeria (CBN).
As of June 30, Stanbic IBTC Group’s loan commitments amounted to N123.99 billion, compared to N97.71 billion at the end of the previous year.
“An amount of N563bn has been recognised as off-balance sheet pledged assets, which represent 30 per cent of the original transaction that was ceded to Stanbic IBTC Bank by Standard Bank of South Africa Limited in a Cross-Currency Interest Rate Swap agreement with CBN involving the exchange of $1bn for N1.482bn.
“As of 30 June 2024, the group had loan commitments amounting to N123.99bn (Dec 2023: N97.71bn) in respect of various loan contracts. The expected credit loss on the off-balance sheet exposures amounts to N663m (Dec 2023: N619m),” it noted.
According to reports gathered, Stanbic IBTC Holdings Plc has announced its intention to raise approximately N550 billion through a combination of a debt issuance program and a rights issue.
This article was written by Tamaraebiju Jide, a student at Elizade University
