Friday, October 26, 2018 01.59PM / NSE with additional comments from FBNQuest Research
FBNQuest – First Reaction
Implications: Stanbic’s results were broadly in line with consensus. On an annualised basis, its 9m 2018 PBT implies that the bank is on track to deliver PBT of over N90bn. Its annualised ROAE of c.36.6% is slightly ahead of management’s 30-35% guidance and is amongst the best within our universe of banks coverage. However, given the limited surprises in the results, we expect to see a muted reaction from the market.
Positives: Q3 PBT of N19.7bn advanced by 19% y/y mainly driven by a -79% y/y reduction in provision for loan losses. Funding income growth of 9% y/y also contributed. In terms of balance sheet trends, Stanbic’s loan book expanded by 7% q/q. Having made net recoveries of N4.1bn ytd, the Stanbic’s cost-of-risk is well below management’s guidance of <1%. NPL ratio improved to 4.7% from around 8.6% in Q2 2018.
Negatives: Pre-provision profits declined by -3% y/y due to a -17% y/y reduction in funding income. The funding income also missed our forecast by around 16%.
Stanbic’s shares have gained 11% ytd, outperforming the NSE ASI by c.26%.
Rating: We rate Stanbic Neutral. Our estimates are under review.
Stanbic Bank Q3 2018 results: actual vs. FBNQuest Capital Research estimates (N millions)
Source: NSE; FBNQuest Capital Estimates
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