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Stanbic IBTC Holdings Plc 2017FY Conference Call and Earnings Presentation - The Key Takeaways

Proshare

Monday, March 19, 2018 04:38 PM / Proshare Markets 


Stanbic IBTC Holdings Plc held its 2017FY Investors and Analyst Conference Call Earnings Presentation. Proshare NG participated along with leading market analysts and professionals. 

In reviewing its operating environment, the bank stated that the operating environment is moderately improving as headline inflation continues to ease; crude oil prices have risen steadily to above USD60 pbl due to efforts taken by both OPEC and non-OPEC members to cap supply; and the increased production volumes as a result of peace in the Niger Delta region have helped stabilize our external Foreign Exchange reserves. 

The bank recorded 36% growth in Gross Earnings to close FY2017 with N212.4bn and also recorded increase in PAT which was driven by significant growth in both interest income and non-interest revenue thereby causing a year-on-year growth in RoAE. 

The bank’s credit impairment charges increased as it continued its clean-up of the risk asset portfolio while its cost-to-income ratio also improved as it continues to improve the efficiency of its operations as well as the excellent growth recorded in total income. 

Its non-performing loans increased to N31.7 billion from N18.7 billion in 2016. The main driver of the increase in NPL was the classification of some corporate clients in construction & real estate, oil & gas downstream and transportation & communication. The bank believe the loans will be resolved soon and its NPL ratio will decline accordingly. 

In a nutshell, below are the key takeaways from the 2017FY earnings presentation made by the bank’s management; 
1. The group maintained adequate capital with total capital adequacy ratio at 23.5% (Bank: 20.5%) which is above the regulatory requirement of 10%.

2. Its balance sheet was funded mainly by deposits from customers which accounted for 54% of total assets.

3. The group’s liquidity ratio closed at 115.4% (Bank: 102.3%) against a regulatory minimum of 30%.

4. The bank remain optimistic that its NPL ratio will moderate around its 2018 guidance ratio by the end of the financial year.

5. Its area of focus for 2018 financial year remain – cost efficiency, improving risk asset quality, growing low-cost deposits, new product development and client service. 

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