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Banking Sector

Stanbic IBTC Holdings Plc Reports 121.46% Surge in Profit in H1 2023

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Stanbic IBTC - investorsking.com

Stanbic IBTC Holdings Plc, a prominent financial institution, has unveiled its half-year 2023 financial report.

This report reveals a 121.46 percent increase in Profit After Tax to N67.919 billion, compared to N30.669 billion filed during the same period in 2022.

The financial report, submitted to the Nigerian Exchange Limited, experienced a slight delay due to the institution’s pursuit of approval from its primary regulator, the Central Bank of Nigeria.

Stanbic’s report highlights impressive financial performance metrics for the period ending on June 30, 2023, including a 58.18 percent boost in gross earnings, a significant 107.58 percent increase in profit before tax, and the aforementioned 121.46 percent surge in profit after tax.

Also, the board of directors has recommended the approval of an interim dividend of 150 kobo per share, which remains consistent with the same period in 2022.

These outstanding results can be attributed to several factors, such as a substantial 44.35 percent rise in Net Interest Income, soaring from N50.353 billion in 2022 to N72.684 billion. Additionally, non-interest revenue experienced a robust growth of 56.64 percent, increasing to N98.618 billion from N62.957 billion.

Although there was a marginal uptick in net impairment loss on financial assets, moving from N5.467 billion to N5.979 billion, it did not deter the overall positive performance.

The institution’s total assets grew by 47 percent to N4.45 trillion (compared to N3.03 trillion in December 2022), and gross loans and advances also showed substantial growth, rising by 37 percent to N1.70 trillion (compared to N1.24 trillion in December 2022).

Commenting on the results, the Chief Executive Stanbic IBTC, Dr Demola Sogunle, said, “The first half of 2023 was an eventful one for us as an organisation within the Nigerian operating environment. Events such as the general elections and cash scarcity led to relatively slower business activities at the beginning of the year, causing the Stanbic IBTC Bank Purchasing Manager Index to print below 50 index points.

“Business activities, however, picked up in the second quarter, with the PMI moving back above 50 points in April 2023 and closing at 53.2 in June 2023, following the improvement in access to cash, increase in customer demand and business expansion. We reported significant growth in our key income lines during the period under review.

“The Group’s profitability increased by over 100 per cent year-on-year (driven by growth across our revenue streams. Interest income grew by 62 per cent YoY, mainly due to higher yield and volume of loans and investments, which is in line with our efforts to support our clients through loan offerings and investment opportunities.”

Sogunle added that Stanbic IBTC Bank processed the first inbound commercial transaction on the Pan African Payment and Settlement System in Nigeria. PAPSS is an initiative of the African Union and the African Continental Free Trade Area Secretariat, designed to promote intra-African trade and economic integration.

He said, “This demonstrates our efforts to provide our clients with efficient and secure payment and settlement solutions across Africa. We will continue to leverage our expertise to provide solutions that enable our clients to unlock the full potential of the African market.”

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Banking Sector

Jaiz Bank Boosts Chairman’s Income to N24m Amidst Strategic Expansion

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Jaiz Bank

Jaiz Bank has announced a 20% increase in its chairman’s annual income to N24 million.

This decision was unveiled in a recent statement filed with the Nigeria Exchange Limited, highlighting the bank’s commitment to rewarding leadership amidst its expansion plans.

The bank, renowned for its pioneering role in non-interest banking in Nigeria since 2012, also approved a remuneration package of N20 million for each non-executive director.

The announcement was made by the bank’s secretary, Mohammed Shehu, highlighting the importance of competitive compensation for board members who provide crucial oversight and strategic guidance.

Shareholders at the Annual General Meeting (AGM) expressed confidence in the board’s leadership by approving the resolution on directors’ fees.

This move aligns with Jaiz Bank’s ongoing efforts to enhance its capital base to N70 billion by the end of 2024.

The bank also announced a dividend of 4 kobo per share, which will be distributed to shareholders on July 16, 2024.

This dividend declaration was welcomed as a testament to the bank’s operational success in a challenging economic climate.

Also, the AGM saw the re-election of Muhammadu Indimi and Muhammad Abdulmutallab as non-executive directors, reaffirming shareholder trust in their leadership capabilities.

Jaiz Bank’s financial performance has been impressive, with a 67% increase in profit before tax, reaching N11.1 billion in 2023.

Gross earnings also rose by 42% to N47.2 billion from the previous year, showcasing the bank’s successful growth strategy.

As Jaiz Bank continues to expand its services, the enhanced remuneration package signals a commitment to maintaining strong governance and leadership, paving the way for future achievements in ethical banking.

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Banking Sector

Nigeria Plans 50% Windfall Tax on Banks’ Currency Profits

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Central Bank of Nigeria (CBN)

Nigerian President Bola Tinubu has announced a one-time 50% tax on windfall profits that banks reaped from currency gains following last year’s naira devaluation.

This decision was part of the government’s strategy to navigate the ongoing cost-of-living crisis.

The naira, which has depreciated by about 70% against the dollar since foreign exchange rules were relaxed in June 2023, allowed banks holding dollar assets to significantly boost their income.

However, the Central Bank of Nigeria had advised lenders to retain these profits as a buffer against potential future losses.

The proposed tax will apply to the 2023 financial year, with non-compliance resulting in hefty fines.

The move has already impacted the NGX Banking Index, which fell by 1.3% as of midday trading in Lagos. Notable declines were seen in FBN Holdings Plc and Zenith Bank Plc, dropping 3.2% and 2.5% respectively.

This initiative mirrors similar actions in Europe, where countries like Italy and Hungary have imposed taxes on banks to address what they view as excessive profits during periods of high inflation and interest rates.

European banks have criticized these measures, warning of potential impacts on economic growth due to constrained lending capabilities.

President Tinubu’s administration believes this tax will help manage Nigeria’s fiscal challenges while addressing social needs.

Lawmakers are expected to support the measure, alongside a proposal to increase government spending by 6.2 trillion naira ($3.8 billion).

While banks have benefited from currency revaluations, many customers, particularly manufacturers with dollar-denominated loans, faced significant losses as they struggled with the weaker naira.

The new tax policy highlights the government’s broader efforts to stabilize the economy and attract foreign investment, aiming to ensure a more equitable distribution of financial gains.

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Banking Sector

Unity Bank Customers Win Over N4 Million in Cashtoken Rewards Promo

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Unity Bank customers have claimed over N4 million in cash rewards in its ongoing loyalty programme recently rolled out with Cashtoken, a Cash Reward-as-a-Service company.

The winners included no fewer than 40 customers who adopted and transacted on the Bank’s digital banking platforms, including the UniFi mobile banking application, the *7799# USSD platform or activated their Unity Bank Verve Card to transact on e-payment terminals across Nigeria.

Beginning from onboarding in our customer lifecycle journey, the Unity Bank Cashtoken Partnership commenced as a loyalty and reward scheme to reinforce the benefits of e-banking platforms. To begin, Customer transactions earn cash tokens, which are then redeemed to qualify for the monthly Cashtoken Rewards draw. Consequently, winners emerge from the draws to claim the cash prizes.

Recall that the retail lender announced the ongoing Cashtoken Rewards loyalty programme in December 2023 in partnership with Cashtoken Rewards Africa to empower customers and improve customer satisfaction. The partnership with Cashtoken Rewards also provided an opportunity for the Bank to migrate customers—old and new—to a platform that will continually create exciting rewards and appreciation for loyalty.

Eghomware Iyamu, Unity Bank’s Head of E-Business, commenting on the success of the Cashtoken Rewards loyalty program, stated: “We are excited to see our customers win over N4 million in cash rewards through our partnership with Cashtoken. This initiative demonstrates our commitment to recognizing and rewarding the loyalty of our customers”.

“By leveraging our digital banking platforms, including the Unifi mobile banking application and the *7799# USSD platform, we are not only enhancing customer experience but also providing life-changing opportunities. The Cashtoken Rewards program is a testament to our dedication to improving customer satisfaction and creating meaningful rewards along our customer lifecycle journey. We look forward to seeing more of our customers benefit from this exciting program as we continue to innovate and deliver exceptional value to them.”

Unity Bank has robust electronic banking products which include mobile and digital banking channels, including ATM, PoS, or any digital payment channels which support retail product transactions across the country. New-to-Bank customers are invited to open a Unity Bank account, onboard onto the digital platforms and begin transacting on the various platforms to earn cash token rewards and cash prizes while existing customers are encouraged to onboard and transact to win even more rewards and cash prizes.

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