Earnings Update: Stanbic IBTC Plc Q1 2022 – Loan Book Growth Spurs Earnings

Exchange Rate Pressures Induce Bottom line Losses


Stanbic IBTC Holdings Plc (‘the Company’) recently released its Q1 2022 financial results. The Company recorded a solid growth relative to Q1 2021. However, the net profit generated was below pre-2021 trend. This suggests to us that if we discount the low base of Q1 2021, underlying growth is still weak. This is unsurprising due to the structural shift in the operating environment of the banking industry. In specific terms, the combination of a low-yield and heightened inflationary environment has not boded well for many companies in the Nigerian economy and the banking industry is not left out.

Based on the Group’s reported numbers, gross earnings grew by 47% YoY to N67.05bn, driven by a 57% YoY increase in interest income and a 39% YoY increase in non-interest income. In effort to mitigate the impact of low asset yields on income generation, the Group aggressively grew its loan book in Q1 2022. On a year-to-date basis, loan book rose by 6% to N980.15bn while it grew by 40% on a YoY basis. The aggressive loan book push resulted in a 71% YoY increase in interest income on loans and advances (which accounted for 72% of total interest income growth in Q1 2022).

The combined performance of net interest income growth (+43% YoY) and non-interest income growth (+39% YoY) translated to a 42% YoY operating income growth.

Profit before tax grew at a higher rate of 61% YoY to N55.49bn, due to a 500 basis points decline in cost-to-income ratio to 64% in Q1 2022 (Q1 2021: 69%). The growth in profit after tax moderated to 34% YoY to N19.59bn due to a higher effective tax charge in Q1 2022 (23% in Q1 2022 vs 7% in Q1 2021).


The released financial results aligned with our expectations. Our expectation for FY 2022 was higher interest income growth on the back of loan book growth. We also expect to see recovery in trading gains, albeit lower than historical levels.

Our FY 2022 EPS remains relatively unchanged at N5.73 (previous:  N5.65). Our fair value estimate for the stock is N32.11. At the current market price, we believe that the stock already reflects its fair value based on our growth expectations. Therefore, we maintain our HOLD recommendation. 

Please follow the link “Stanbic IBTC Plc Q1 2022 – Loan Book Growth Spurs Earnings”  to view the whole report.

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