Stanbic IBTC Holdings Plc has recorded a remarkable 180 per cent rise in net interest income, fueled by the Central Bank of Nigeria’s (CBN) aggressive rate hikes in 2024. The bank’s financial report for the nine months ending September 2024, filed with the Nigerian Exchange Limited (NGX), shows strong performance across multiple revenue streams despite a challenging economic environment. The bank’s after-tax profit grew by 67.3 per cent, closing at N182.8 billion, compared to N109.2 billion recorded in the same period of 2023.
The surge in profitability was driven by a significant increase in interest income, which rose to N425.7 billion from N184.5 billion in the previous year, as Stanbic IBTC capitalized on the high-interest rate environment. However, interest expenses also rose sharply by 171.3per cent, reaching N173.9 billion from N64.1 billion. The CBN’s monetary tightening, with a cumulative increase of 850 basis points in 2024, has pushed the Monetary Policy Rate (MPR) to 27.25 per cent as of September 2024.
This has significantly increased the interest charged by banks on loans, boosting Stanbic IBTC’s revenue. The bank’s trading revenue also saw a boost, growing to N80.2 billion from N59.7 billion, primarily driven by activity in fixed-income securities and currency trading. Fees and commission income surged 58.9per cent to N134.3 billion, up from N84.5 billion in the previous year, with asset management fees accounting for 54 per cent of this total. Notably, brokerage and financial advisory fees grew by 133 per cent, and foreign currency service fees rose by 126 per cent.
However, Stanbic IBTC reported an impairment loss on financial instruments amounting to N59.3 billion, a significant shift from an impairment write-back of N9.95 billion in 2023. The rising cost of doing business in Nigeria, driven by inflation and energy disruptions, also impacted the bank’s operating expenses, which increased to N183.5 billion from N123.1 billion. Despite these challenges, Stanbic IBTC’s business activities generated substantial cash flow, with net cash from operating activities rising to N1.84 trillion, compared to N406 billion in the same period of 2023.
Net cash flow from investing activities, however, was negative at N405 billion, largely due to capital expenditures and financial instrument purchases. The bank also made strides in debt management, repaying N119 billion in borrowings and N44 billion in debt securities, while paying dividends totaling N56 billion. As a result, net cash flow from financing activities amounted to N107 billion, and cash and cash equivalents for the period increased by 129.3per cent to N1.9 trillion from N837 billion.
Stanbic IBTC’s total assets grew by 37 percent, reaching N7.2 trillion, driven by a rise in loans and advances to N2.42 trillion from N1.77 trillion. Deposits and current accounts grew to N3.46 trillion from N2.49 trillion, while total shareholders’ funds increased by 33.7per cent to N630 billion. Ultimately, the bank declared earnings per share of N1,390 in the first nine months of 2024, up from N825 per share in the corresponding period of 2023, reflecting its strong financial performance amid a tough economic climate.
