March 07, 2019 06:55 PM / CardinalStone Research
Stanbic IBTC Holdings Plc (STANBIC) FY’18 results – gross earnings grew by 4.7% YoY to N222.4 billion, in line with our expectation of N225.1 billion (-1.2% deviation). More remarkably, after tax earnings climbed 53.7% YoY to N74.4 billion, within our N76.9 billion projection (-3.2% deviation).
STANBIC proposed a final dividend of N1.50 per share. This translates to a dividend yield of 3.1% based on the last close price of N48.00
STANBIC’s FY’18 bottom line was supported by 15.0% YoY growth in non-interest income and impairment writebacks of over N3.0 billion (compared to impairment losses of N25.6 billion in FY’17). On a segment basis, we saw improvement in the Personal and Business Banking (PBB) business which returned to profitability (N581 million vs loss of N16.5 billion in FY’17). The Corporate and Investment Banking (CIB) business recorded a 12.0% YoY growth in profit after taxes, supported by trading gains and impairment write-backs, while the Wealth business also reported an 18.2% YoY increase in earnings supported by a 19.0% growth in assets under management (AUM). Overall, return on average equity inched higher to 34.5% (FY’17 – 28.9%), while CAR (21.0%) remains above the regulatory threshold of 10.0%.
Based on our last review, our target price for the counter is N52.29 (HOLD). Following the release of the results, STANBIC gained 3.0% at the close of trading today. We will revise our estimates after discussion with management on the result.
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