Figures from Stanbic IBTC Holdings Plc financial statements showed a 40 percent drop in profit for the nine months ended September 2021.
The results which were disclosed in the bank’s unaudited financial statement released on the Nigerian Exchange Limited showed a huge fall in profit after tax from N66.2 Billion reported in 2020 to N39.9 Billion reported in 2021. Profit before tax also dipped by 41 percent from N76.9 Billion in 2020 to N45.3 Billion in 2021.
This decline in profits is driven largely by the drop in Gross earnings and the hike in operating expenses for the bank. Gross earnings dropped to N146.6 Billion in 2021 from N183.3 Billion in 2020. The Group also spent considerably more on operating expenses, the Group’s total operating expenses rose by 12 percent from N70.85 Billion in 2020 to N79.35 Billion in 2021.
The statement of financial position of the Bank shows the Group’s total assets increased by 11 percent, from N2.486 Trillion in 2020 to N2.749 Trillion in 2021. Non-performing loans the bank incurred increased by eight percent, from N26.5 Billion in 2020 to N28.7 Billion in 2021.
The Chief Executive Officer of Stanbic IBTC, Dr. Demola Sogunle commented on the Bank’s results saying: “We saw further improvement in key income lines in the third quarter when compared with the second quarter. Both net interest income and non-interest revenue grew quarter-on-quarter driven by increases in interest income and trading revenue while operating expenses moderated due largely to the absence of the AMCON levy recognition in the third quarter of 2021.”
“The increase in interest income arose from an increase in volume and average yield of loans and investments. Trading revenue growth, on the other hand, resulted from the increase in the volume of trading activities.”
“Customer loans continued to grow in line with trend from the prior quarters and grew further by eight percent quarter-on-quarter as we continued to support our clients. This was funded by growth in customer deposits, which increased by 14 percent quarter-on-quarter, thereby exceeding the N1 Trillion mark”.
He went on to say: “We mentioned during our last results’ conference call, that the Group is undergoing a future-ready transformation, that is, transitioning from a product/service focus to a Client segment led organization effective August 2021. Accordingly, we present to you our very first set of financial results reported in line with this new structure. Our new segments include Wholesale Clients (formerly known as Corporate and Investment Banking), Consumer and High Net-worth Clients (formerly known as Personal Banking), Wealth and Investment Customers, and Business and Commercial Clients (formerly known as Business Banking). The Wholesale Clients segment is responsible for managing large-scale corporate relationships. The Customer and High Net-worth Clients segment are responsible for managing consumer, affluent client relationships and the service channels through which we reach these clients while the Business and Commercial Clients Segment is responsible for managing business-to-business relationships as well as related service channels.”
“Thus, in line with our core value of delivering value to our shareholders, the restructuring will advance the execution of our digital business transformation and enable us to achieve accelerated future readiness for the business and growth through effective mining of the client ecosystems propelled by a future-ready workforce. We continue to make progress in supporting the financial needs of our communities in the third quarter of 2021. Investing to advance tree planting exercise, youth, and women empowerment through donations, sponsorships and partnerships, library upgrade and renovation, hospital unit refurbishment, amongst others.”
