In a bid to cut costs and turn around its declining profitability, Stanbic IBTC Holdings Plc has announced plans to seek regulatory approval for the establishment of a Fintech subsidiary.
The new financial services unit will be called Stanbic IBTC Financial Services Limited, the bank disclosed in a statement signed by Chidi Okezie, Company Secretary and seen by Investors King.
This is coming a few days after Standard Chartered Bank announced it was shutting down 50 percent of its Nigerian branches in a move to digitalise operations and reduce operating costs.
According to Stanbic IBTC, the new fintech company will operate as a Payment Solution Service Provider (PSSP) upon regulatory approvals, including licensing by the Central Bank of Nigeria.
Stanbic IBTC Holdings Plc reported a 40 percent decline in profit in the first nine months of 2021, its lowest in four years. Profit after tax dropped from N66.2 Billion reported in 2020 to N39.9 billion in 2021. Profit before tax also dipped by 41 percent from N76.9 billion in 2020 to N45.3 billion in 2021.
Dr. Demola Sogunle, Chief Executive Officer of Stanbic IBTC, who commented on the bank’s performance and plans for the future in October 2021, hinted at the bank’s plans to go digital and restructure some of its key units.
He said “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.”
As expected, using financial technology to deliver banking services would help Stanbic access the unbanked population, improve quality of service, enhance delivery and most importantly cut costs across the board.