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Stanbic IBTC Holdings Plc last week released its audited financial statements for the year ended December 31, 2015 following an acceptable settlement with the Financial Reporting Council (FRC).
The full year 2015 results at the Nigerian Stock Exchange (NSE) showed the group’s gross earnings increased by 7.17percent, while profit before tax (PBT) decreased by 45.66percent for the year ended December 31, 2015.
The company is a member of the Standard Bank Group, which holds a 53.2percent equity holding (through Stanbic Africa Holdings Limited) in the company.
The board recommended the approval of a final dividend of 5 kobo per share for the year ended December 31, 2015 against 15 kobo per share paid December 31, 2014.
Stanbic IBTC Holdings Plc has nine direct subsidiaries: Stanbic IBTC Bank, Stanbic IBTC Pension Managers Limited, Stanbic IBTC Asset Management Limited, Stanbic IBTC Capital Limited, Stanbic IBTC Investments Limited, Stanbic IBTC Stockbrokers Limited, Stanbic IBTC Ventures Limited, Stanbic IBTC Insurance Brokers Limited and Stanbic IBTC Trustees Limited.
The Group’s gross earnings rose to N140.027billion from N130.65billion in 2014. Profit Before Tax (PBT) declined to N23.651billion from N43.527billion in 2014. Profit After Tax (PAT) declined to N18.891billion from N34.459billion in 2014.
Net interest income (NII) declined to N43.860billion from N46.658billion in the preceding year. Net fee and commission revenue rose to N40.704billion from N39.267billion in 2014. Operating expenses rose to N62.066billion from N57.901billion in 2014. Basic earnings per ordinary share (kobo) declined to 155 kobo from 317kobo in 2014.
The results further showed that its total unclaimed dividend fund as at December 31, 2015 amounted to N1.574 billion, out of which N523million of the fund balance is held in an investment account (money market mutual fund) managed by Stanbic IBTC Asset Management Limited, while the balance is held in demand deposits maintained with Stanbic IBTC Bank Plc.
Total income earned on the investment account and recognised by the company for the year ended December 31, 2015 was N77 million (2014: N71 million).
“The results in themselves showed that the underlying results were in line with expectations. The full year PBT figure shows a decline of-46% y/y while the PAT is down-39% y/y. The driver behind these declines is the loan loss provisions line which shows a marked 364% y/y increase to N14.9billion”, said Olubunmi Asaolu team of research analysts at FBNQuest.
“We have updated our model and revised our forecast. Whilst we raise our top line estimate for FY’16 and FY’17 to N161 billion and N165 billion respectively (Previous: N142 billion and N156 billion), we also revise our loan loss provision higher to FY’16: N24.2 billion (Previous: N10.1 billion) and FY’17: N21.6 billion (Previous: N9.1 billion)”, according to Olalekan Olabode team of analysts at Lagos-based Vetiva Capital Management Limited.
With Stanbic IBTC Holdings Plc top line growth outpacing the analysts expense growth estimate, they expect the pressure on efficiency to moderate in FY’16 and forecast a Cost Income Ratio (CIR) of 61%. “Consequently, we value the stock at a 12-month Target Price (TP) of N15.09. STANBIC trades at a premium to peers with 2016E price-to-earnings (P/E) and price-to-book (P/B) of 7.5x and 1.1x compared to our coverage banks’ averages of 3.5x and 0.4x respectively,” the analysts added.
Iheanyi Nwachukwu
