By Chimamanda Okafor
Stanbic IBTC recorded an impressive pre-tax profit of N303.8 billion in 2024, marking a 75.70% year-on-year (YoY) increase.
This significant growth was driven by a sharp rise in net interest income (+134.29%) and net fees and commission income (+54.52%), underscoring the bank’s strong revenue performance across both interest and non-interest income streams.
Financial Highlights:
- Interest Income: N566.462 billion (+109.34% YoY)
- Interest Expense: N156.011 billion (+63.53% YoY)
- Net Interest Income: N410.451 billion (+134.29% YoY)
- Net Fees & Commission Income: N170.394 billion (+54.52% YoY)
- Net Impairment Loss on Financial Assets: N99.360 billion (+543.02% YoY)
- Income After Impairment Charge for Losses: N547.485 billion (+61.16% YoY)
- Operating Expenses: N243.689 billion (+46.09% YoY)
- Profit After Tax: N202.104 billion (+43.73% YoY)
- Earnings Per Share: N15.31 (+44.16% YoY)
- Loans & Advances to Customers: N2.348 trillion (+15.55% YoY)
- Cash & Cash Equivalents: N2.245 trillion (+62.13% YoY)
- Total Assets: N6.912 trillion (+34.34% YoY)
- Customer Deposits: N3.009 trillion (+45.20% YoY)
- Shareholders’ Funds: N647.441 billion (+27.72% YoY)
Key Insights for Investors
Shifting Interest Income Sources
Total interest income surged by 109.34% YoY. However, its composition evolved:
- Interest income from loans and advances to customers grew by 71%, yet its contribution to total interest income declined to 69% (down from 85% in 2023).
- Interest income from securities soared by 347%, now making up 28.49% of total interest income.
This indicates a strategic shift towards fixed-income securities, likely influenced by attractive yields on government instruments.
Deposit Growth & Rising Funding Costs
Customer deposits rose by 45.20% to N3.009 trillion, reinforcing the bank’s strong liquidity and customer trust. However, funding costs are also climbing:
- Interest expenses on customer deposits jumped by 173%, accounting for 54% of total interest expenses.
This suggests that higher interest rates and competition for deposits are pushing up costs, potentially pressuring net interest margins in the future.
Credit Risk & Rising Impairments
While loans and advances to customers grew by 15.55%, impairments escalated sharply by 561% to N88.664 billion, outstripping loan growth.
This trend signals a deterioration in asset quality, possibly driven by macroeconomic instability, rising defaults, or increased exposure to riskier borrowers.
The stark contrast between moderate loan growth and soaring impairments raises concerns about credit risk management and potential effects on profitability.
Operational Efficiency & Shareholder Value
- Operating expenses grew by 46.09%, reflecting higher costs, though profitability remained robust.
- Earnings per share (EPS) climbed 44.16% YoY, boosting investor returns.
- Shareholders’ funds increased by 27.72%, reflecting earnings retention and potential value appreciation.
Final Thoughts
Stanbic IBTC delivered a stellar financial performance in 2024, characterized by strong profit growth, higher interest income, and a resilient balance sheet.
However, rising impairments and funding costs present risks. The bank’s increasing reliance on securities income over lending suggests a strategic adaptation to the high-interest-rate environment.
Investors should closely monitor credit risk trends and funding costs. Nevertheless, given its solid profitability and expanding asset base, Stanbic IBTC’s overall outlook remains positive.