Explainer: Stanbic IBTC Q2 2024 profits reports 80.4% increase

Stanbic IBTC Plc has achieved a significant milestone, reporting a record-breaking 80.4% increase in pre-tax profits for Q2 2024, reaching N84.2 billion. This marks the highest quarterly profit ever recorded by the company, according to data from Nairametrics.

For the first half of 2024, Stanbic IBTC’s pre-tax profit surged to N147 billion, a substantial rise from the N82.9 billion reported during the same period in 2023. This strong performance puts the bank on track to reach a pre-tax profit of N200 billion by the end of the year.

Key Financial Highlights for Q2 2024 vs. Q2 2023:

– Net Interest Income: N97.3 billion, up by 168.3%
– Net Interest After Impairments: N77.9 billion, up by 32%
– Operating Income: N145.7 billion, up by 66.4%
– Operating Expenses: N61.4 billion, up by 50.3%
– Pre-tax Profits: N84.2 billion, up by 80.4%
– Loans and Advances: N2.17 trillion, up by 30.3%
– Total Deposits: N2.89 trillion, up by 24.9%
– Total Assets: N6.1 trillion, up by 37.1%
– Net Assets: N584.5 billion, up by 29.6%
– Earnings Per Share (EPS): N6.4, compared to N3.5

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What Drove These Results?

Stanbic IBTC’s impressive performance was primarily fueled by a sharp increase in interest income, both from customer loans and investments. Here’s how it breaks down:

1. Interest Income from Loans: The interest earned on loans and advances to customers nearly doubled, from N91.1 billion in the first half of 2023 to N183.1 billion in the same period of 2024. This was largely driven by the higher interest rate environment.

2. Interest Income from Investments: Income from investments also saw a significant rise, growing from N16.7 billion to N56.1 billion over the same period.

3. Commission and Fees: The bank also experienced a notable boost in commission and fees income, which rose to N82.9 billion in H1 2024, compared to N51.1 billion in H1 2023. This includes:
Asset Management Fees: N47.2 billion
Brokerage and Financial Advisory Fees: N11.7 billion

4. Fixed Income and Currencies: While slightly lower than the previous year, income from fixed income and currencies remained strong at N39.6 billion, compared to N44.7 billion a year earlier.

Market Reaction

Stanbic IBTC’s strong financial performance has positively impacted its share price, which closed at N58.95 per share, marking a 3.6% increase as of mid-day trading.

In summary, Stanbic IBTC’s record-breaking Q2 2024 results highlight the bank’s ability to capitalize on a favourable interest rate environment, expand its loan book, and generate substantial income from investments and fees, all while maintaining a strong position in the Nigerian financial market.