Stanbic IBTC Holdings PLC - thevault.exchange...Merged with Chartered Bank & Regent Bank and changed...

Stanbic IBTC Presentation / page 1 /

Stanbic IBTC Holdings PLC

(“Stanbic IBTC”)

H1 2017 Result PresentationAugust 2017


Contents

Section Page

1. Stanbic IBTC and its operating environment 3

2. Financial results – H1:2017 9

3. Business unit results 24

4. Outlook for H2: 2017 36

5. Appendix 40

Stanbic IBTC and its

operating environment Yinka Sanni

Chief Executive, Stanbic IBTC Holdings PLC


Stanbic IBTC is a financial Institution in

Nigeria that offers end-to-end financial

services through a three-pronged structure;

Corporate and investment banking, Personal

and business banking and wealth

management.

Stanbic IBTC is 53.2% owned by Standard

Bank Group and draws on the deep

resources within the Standard Bank Group.

Stanbic IBTC emerged from the merger of

Stanbic Bank Nigeria Limited with IBTC

Chartered Bank Plc in 2007.

Stanbic IBTC is the leading investment

banking franchise in Nigeria with excellent

capabilities in advisory and capital markets

and is the only local bank with a Fitch AAA

rating

1989 2001 2005 2007 2012

Incorporated as Investment Banking & Trust

Company Limited and commenced operations as a

Merchant bank

Obtained Universal Banking

Licence in NigeriaListed on The NSE on 25 April 2005

Merged with Chartered Bank & Regent Bank

and changed name to IBTC Chartered Bank Plc

Merged with Stanbic Nigeria and Standard Bank gained

control of the combined entity in a US$1bn transaction

Holding Company Structure was adopted.

Stanbic IBTC

Trustees Ltd

Stanbic IBTC Nominees

Nigeria Ltd

Stanbic IBTC

Ventures Ltd

Stanbic IBTC

Bureau De Change Ltd

99.9%

Stanbic IBTC

Bank PLC

99.9%

Stanbic IBTC Holdings PLC

88.24%99.9%99.9% 99.9% 99.9%

99.9% 99.9%99.9%

Stanbic IBTC Pension

Managers Ltd

Stanbic IBTC

Investments Ltd

Stanbic IBTC Asset

Management Ltd

Stanbic IBTC

Capital Ltd

Stanbic IBTC

Stockbrokers Ltd

About Stanbic IBTC Holdings PLC

Stanbic IBTC

Insurance Brokers Ltd

75%


Strategic Objectives

Customer Service: deliver

exceptional service and delight our customers

Volumes/ Cost: achieve volumes

while managing costs

End-to-end selling: ensure we provide

end to end solutions to our customers.

Brand: establish a

differentiated and well

recognized brand in Nigeria

People: ensure our people are

accountable, passionate and

engaged.

Operating Platform: ensure our processes and infrastructure are

scalable and customer-focused

To be the

leading end-to-

end financial

solutions

provider in

Nigeria through

innovative and

customer

focused

people.

Committed to

solutions that

drive your

progress.

Mission

Strategic Objectives

Vision


Faster decision making and better communication

Digitization

Customer centricity

Collaboration

What are we doing?

Identify various processes

within the businesses that

have impact on timing of

response to customers

Review those processes

and streamline action

points.

Monitor these processes

through customer

feedback and net

promoter score results

What do we expect?

Improved turnaround time

on customer requests.

Elimination of ambiguity in

approval process

Reduction in delay in

getting needed approvals

Increased customer

satisfaction and loyalty

Significant reduction in

customer complaints

Reduced rework and

printing/stationery cost

Faster decision

making and better

communication

What are we doing?

We will adopt an approach

that will enable us defend

our traditional sources of

revenue, differentiate on

our products & services and

disrupt to achieve market

leadership

Reviewing current systems

and processes to assess the

required investment in

infrastructure

A fully digital branch has

been launched allowing

customer carryout self

service transaction with

deposit and payment teller

machines

A pilot phase of online

account opening is also

being tested in the digital

branch

What do we expect?

We want to ensure that our

products and services, by

the use of technology, are

enabled (always on,

anywhere, anytime,

contextually relevant)

Digitization

What are we doing?

Set up committees with

senior management team

members to drive customer

centricity in the organization.

Create a staff culture that

embodies SIBTC core

values and brings the eight

values of the group to

prominence

Revamped the Customer

Contact Centre (CCC) and

expand alternative banking

channels

What do we expect?

Improved ranking in the

2016 KPMG Banking

Industry Customer

Satisfaction Survey (BICSS)

with the aim of remaining in

top 3 over the long term

Increased share of customer

wallet and businesses

Significant reduction in

customer complaints

Customer

Centricity

What are we doing?

Strengthening collaboration

among operating entities

which fully exploits

opportunities within the

universal banking strategy.

Adopted an ecosystem

model to onboard

distributors, suppliers and

employees of our top CIB

customers into our PBB

business.

Set cross sell targets for

staff members to ensure

staff across all business

imbibe sales culture and are

able to sell the group’s

products

What do we expect?

Sustainable growth in profit

Increased share of customer

wallet and businesses

Greater efficiency in

managing operations

Lower cost of operations

Collaboration

2017 key focus areas


Moderately improving operating environment

Movement in external reserves

Headline inflation

Crude oil price movement (monthly average)

20.0

22.0

24.0

26.0

28.0

30.0

32.0

US$

-

10.0

20.0

30.0

40.0

50.0

60.0

US$

16.5

17.1

17.6 17.9

18.3 18.5 18.6

18.7

17.8

17.3 17.2

16.3 16.1

14.5

15.0

15.5

16.0

16.5

17.0

17.5

18.0

18.5

19.0

Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17

%

External Foreign Exchange (“FX”)

reserves remained broadly

unchanged during the course of the

first half of the year, despite the

Central Bank stepping up its FX

interventions. This was as a result of

a combination of relatively higher oil

prices and improving production

volumes. FX reserves remained

around the USD30.0bn mark as at

the end of June 2017.

Crude oil prices initially dropped

below USD48 pbl on the back of

oversupply concerns. However,

during the course of the first half of

the year, prices have risen steadily

to above USD52 pbl due to efforts

taken by both OPEC and non-OPEC

members to limit supply.

We expect that headline inflation will

moderate slowly around 15% y/y by

year end, after falling to 16.1% y/y in

June, from 16.3% y/y in May.


Challenging operating environment

Exchange rate movement

Interest rate movement

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17

Average inter-bank call rate Tbills - 91 days Tbills - 182 days Tbills - 1 year Bond - 3 year

The Investors’ & Exporters’ Foreign

Exchange (“IEFX”) window remains the

most liquid segment of the FX market,

with around USD6.0bn traded as at

June 2017. Most market participants,

including portfolio flows, payments for

services, dividend payments as well as

demand for the imports of finished

goods continue to transact in the

window. Rates ranged between 320

and 375 within this window.

The yield curve is inverted at the short

end, with the 5-y bond yielding 16.3%

compared with the 22.6% 1-y T-bill

yield, and we see no imminent easing

of the policy stance by the CBN. In fact,

we expect that the CBN will continue to

sterilize NGN via a combination of

Open Market Operations (OMOs) as

well as requiring pre-funding for bids at

the CBN’s retail and wholesale SMIS

window. The tight monetary stance is

not expected to change until inflation

subsides further.

100

200

300

400

500

600

May-14 Nov-14 May-15 Nov-15 May-16 Nov-16 May-17

NG

N / U

SD

rate

CBN Parallel market NIFEX NAFEX I&E FX Window

Financial Result

H1:2017 Victor Yeboah-Manu

Chief Financial Officer, Stanbic IBTC Holdings PLC


Summary of H1 2017 performance

Profitability

Credit impairment

charges increased by

65% to N13.95bn

Net Interest Income grew

by 80% to N41.0bn

Non Interest Revenue up

18% to N40.3bn

PAT up >100% to N24.1bn

PBT up 86% to N29.2bn

Gross Earnings up

36% to N97.2bn

Balance Sheet

Customer deposits grew

by 13% to N632.8 bn

Trading assets grew by over

100% to N85.8bn

Total assets up 21% to N1.27 trn in H1:17 (FY 2016: N1.05 trn)

Customer loans (net) increased

slightly by 4% to N368bn

CapitalTotal CAR

Group 22.9% (FY 2016:

22.8%), Bank: 20.2% in H1:17(FY

2016: 21.0%)

Shareholders’ fund increased

by 16% to N159.5 bn.


Key ratios

• PAT increase was driven by significant

growth in interest income and non-interest

revenue thereby causing our annualized

ROaE to improve significantly.

• The 81% trading revenue growth was largely

impacted by increased FX availability

following the continued CBN intervention and

the IEFX window which subsequently led to

trading asset growth.

• Credit impairment charges increased as we

continued our clean-up of the risk asset

portfolio.

• Cost to income ratio improved as a result of

improved operational efficiencies and the

excellent growth recorded in total income.

• Customer loans (net) increased as we began

to increase lending though cautiously as

business activities gradually improves.

• Customer deposits growth was driven by a

continued effort at raising Current-Account-

Savings-Account (“CASA”) (which is 60.1%

of total customer deposit) to replace

expensive term deposits .

• Total assets increased following a significant

growth in trading assets.

H1 2017 H1 2016

7.2%

4.4%

Net Interest Margin 47.0%

57.7%

Cost to Income Ratio 7.3%

4.3%

Credit Loss Ratio

31.3%

15.0%

Return on Average Equity

4.3%

2.2%

Return on Assets

90.4%

86.5%

Liquidity

(Bank) 230 kobo

95 kobo

Basic EPS

7.8%

6.9%

NPL Ratio


Income

Statement

Balance sheet

Key ratios

Overview of income statement in H1 2017

Drivers of group income statement

56,728

(15,693) 40,289

(13,953)

(38,202)

29,169

(5,057) 24,112

0

10 000

20 000

30 000

40 000

50 000

60 000

70 000

80 000

90 000

Interest income Interest expense Non-interestrevenue

Credit impairmentcharges

Operatingexpenses

Profit beforetaxation

Taxes Profit aftertaxation

Nmillion


Balance sheet

Key ratios

Income statement - NII

Evolution of net interest income

Drivers of net interest income Breakdown of interest income

72%62%

70% 72%

49%

25%32%

26% 27%

48%

3% 6% 4% 1% 2%

0%

20%

40%

60%

80%

100%

H1 2013 H1 2014 H1 2015 H1 2016 H1 2017

Loans and advances Investment securities Placements

Net interest income was up by

80% as interest income

increased by 55% to N56.7

billion (H1 2016: N36.7 billion)

largely due to growth in income

from investment securities

despite a 13% growth in interest

expense.

Consequently, net interest

margin improved as a result of

increase in asset yields.

Increase in asset yield was on

the back of higher yields on

investment securities which

contributed to the growth in

interest income.

Cost of funds increased slightly

on account of growth in interest

expense resulting from an

increase in customer deposits.

17,937 22,977 22,135 22,849 41,035

4.9%5.6%

4.5% 4.4%

7.2%

4.2%5.3%

2.9% 2.8%

4.8%

0.0%

2.0%

4.0%

6.0%

8.0%

-

10,000

20,000

30,000

40,000

50,000

H1 2013 H1 2014 H1 2015 H1 2016 H1 2017

Net interest income Net interest margin before impairment charges Net interest margin after impairment charges

Nmillion

5.6

6.4

7.2

5.2

8.0

2.2 1.8

2.7

1.7 2.0

4.9 5.6

4.5 4.4

7.2

H1 2013 H1 2014 H1 2015 H1 2016 H1 2017

Asset yield Cost of funds Net interest margin


Income statement - NIR

Evolution of non-interest revenue

Breakdown of non-interest revenue by type

H1: 2017 H1: 2016

24,068 27,517 26,346 34,218 40,289

57% 54% 54% 60% 50%

0%

20%

40%

60%

80%

100%

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

H1 2013 H1 2014 H1 2015 H1 2016 H1 2017

Non-interest revenue % of total income

Fees & comm, 80%

Trading revenue, 19%

Other revenue, 1%

Fees & comm, 69%

Trading revenue, 30%

Other revenue, 1%

Non-interest revenue grew by 18%

driven by an 81% increase in

trading income and an over 100%

growth in other income.

Growth in trading revenue was

driven by increased income from

foreign exchange transactions and

fixed income, both growing by over

100% following the CBN’s

continued introduction of initiatives

to increase FX liquidity and

customer activity.


Income statement - credit impairment

Credit impairment charges trend

Movement in credit impairment charges

Credit impairment charges

increased by 65% to

N13.95 billion from N8.45

billion in H1 2016 as a

result of additional

provisioning for bad &

doubtful loans.

Credit loss ratio worsened

to 7.3% as additional credit

impairment charges were

raised in line with efforts to

accelerate the write-off of

delinquent facilities. change H1 2017 H1 2016

% Nmillion Nmillion

Specific credit impairment charges >100 16,688 5,175

Provision for performing loans >(100) (1,796) 3,515

Total impairment charges 71 14,892 8,690

Recoveries >100 (939) (238)

Credit impairment charges 65 13,953 8,452

1,875 1,883

5,525 5,175 16,688

493 445 2,374 3,515

(1,796)1.0 0.8

3.7

0.8

7.3

(1.5)

0.5

2.5

4.5

6.5

8.5

(5,000)

0

5,000

10,000

15,000

20,000

H1 2013 H1 2014 H1 2015 H1 2016 H1 2017

Credit impairment charge on non-performing loans Credit impairment charge on performing loans Credit loss ratio

N’million %


Income statement – operating expenses

Operating expenses and cost-to-income ratio

Taxation and effective tax rate

20,768 23,640 31,045 32,935 38,202

63.1%57.7%

64.0% 57.7%

47.0%

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

-

10,000

20,000

30,000

40,000

50,000

H1 2013 H1 2014 H1 2015 H1 2016 H1 2017

Operating expenses Cost-to -income ratio

N'million

2,909 3,762

(158)

4,365 5,057

22.2%

18.9%

-1.7%

27.8%

17.3%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

(1,000)

-

1,000

2,000

3,000

4,000

5,000

6,000

H1 2013 H1 2014 H1 2015 H1 2016 H1 2017

Taxation Effective tax rate

Nmillion

Operating expenses increased by 16% from

H1 2016.

Staff cost was up 15% due to increase in

accrued performance reward and increase in

staff salaries to adjust for inflation. Average

headcount also increased to ensure

adequate manpower to drive our strategy.

Other operating expenses increased by 17%

mainly as a result of growth in AMCON

expenses and deposit insurance premium

following the growth in customers deposits.

Cost to income ratio improved to 47.0% from

57.7% recorded in prior year as we continue

to maintain a higher growth in total income

compared to cost growth.

Effective tax rate declined to 17.3% from

27.8% in H1 2016 although the tax payable

increased YoY as profit grew.


Balance sheet - Total assets

Total assets mix Total assets and ROA trend

Breakdown of total assets

1,273,960

327,621

112,30228,938

302,056

367,956

111,88023,095

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

Total Assets Cash & loans to bank Trading and derivativeassets

Pledged assets Financial investments Loans & advances tocustomers

Other assets Intangible assets,property & equipment

Nmillion

763 945 938 1,054 1,274

2.9%

3.7%

1.7%2.5%

4.3%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

-

200

400

600

800

1,000

1,200

1,400

2013 2014 2015 2016 H1:2017Total assets Return on assets

N'billion

31% 25% 24% 30% 26%

11% 17% 22%24% 24%

40% 38% 32%34%

29%

18% 20% 22% 12% 22%

0%

20%

40%

60%

80%

100%

H1 2015 FY 2015 H1 2016 FY 2016 H1 2017

Cash & loans to banks Financial investments

Loans & advances to customers Others


Balance sheet – Loans and advances

Loans and advances trend

Contribution to loans and advances by product

Gross loans and advances by currency

431.5 379.4 407.1 375.3 393.7 -

100.0

200.0

300.0

400.0

500.0

H1 2015 FY 2015 H1 2016 FY 2016 H1 2017

Nbillion

375,316

(485) (1,716) 2,313 18,260

393,688

Gross loansand

advances -FY 2016

Mortgagelending

Installmentsales andfinanceleases

Overdrafts Term loans Gross loansand

advances -H1 2017

Gross loans portfolio

increased by 5% in H1

2017 from FY 2016 due

to renewed lending.

Installment sales, finance

leases and mortgage

loans declined as a result

of maturities in the year.

Increase in overdraft and

term loans was due to a

review of risk appetite

considering the current

economic situation.

LCY FCY Total loans

N'millionN'million N'million

Personal & Business

Banking 115,567 23,524 139,092

Mortgage 8,370 - 8,370

Instalment sale & finance

leases 16,644 774 17,418

Overdrafts 19,042 2,086 21,128

Term loans 71,512 20,665 92,176

Corporate & Investment

Banking 127,841 126,756 254,597

Term loans 97,767 126,756 224,523

Overdrafts 28,653 - 28,653

Instalment sale and finance

lease 1,420 - 1,420

Total loans 243,408 150,280 393,688

% of loans 62% 38% 100%


Balance sheet – Loans and advances

Breakdown of loans by sector

H1 2017 FY 2016

Agriculture7% Construction and

real estate11%

Consumer credit12%

Downstream Oil & Gas6%General

commerce, Finance & Insurance

10%

Government3%

Manufacturing33%

Oil & gas services2%

Transportation & communication

8%

Upstream Oil & Gas8% Agriculture

8%Construction and

real estate10%

Consumer credit14%

Downstream Oil & Gas

8%

General commerce, Finance & Insurance

10%

Government4%

Manufacturing27%

Oil & gas services

2%

Transportation & communication

9%

Upstream Oil & Gas8%


Balance sheet – Loan performance

Non-performing loans and NPL ratio Non-performing loans ratio by sector

Non-performing loans by currency (N’million)

13.4 18.0 27.0 18.7 30.9

4.4%

4.3%

7.1%

5.0%

7.8%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

-

5.0

10.0

15.0

20.0

25.0

30.0

35.0

2013 2014 2015 2016 H1:17

Non-performing loans NPL/ total loans

Nbillion

H1:17 % of total NPLs 2016 % of total NPLs

Local currency 17 248 56% 16 096 76%

Foreign currency 13 638 44% 2 579 24%

Total NPLs 30 885 100% 18 675 100%

The non-performing

loans increased to

N30.885 billion

(2016:N18.675billion)

The main driver of the

increase in NPL was

the classification of a

major corporate client

in the oil & gas sector

whose operations were

disrupted by militancy

action. With calm

restored in the region,

we expect the loan to

return to performing.

Consequently, NPL

ratio increased to 7.8%

(FY:2016 5.0%)

H1 2017 FY 2016

Sector% of Total

NPL

NPL ratio

(%)

% of Total

NPL

NPL ratio

(%)

Agriculture 3.3% 3.9% 16.7% 10.6%

Construction and real

estate2.0% 1.4% 1.7% 0.8%

Consumer credit 15.4% 10.0% 23.1% 8.2%

Government 0.6% 1.4% 0.6% 0.8%

Electricity & other utilities 0.0% 0.0% 0.0% 0.0%

Manufacturing 10.5% 2.4% 9.2% 1.7%

Downstream Oil & Gas 7.3% 9.2% 1.9% 1.2%

Oil & gas services 1.8% 8.8% 9.4% 21.9%

Upstream oil & gas 43.6% 43.6% 0.0% 0.0%

General commerce 5.7% 4.5% 13.0% 6.4%

Transportation &

communication10.0% 10.2% 24.2% 13.1%

Grand Total 100.0% 7.8% 100.0% 5.0%


Balance sheet – Customer deposits

Customer deposits and CASA ratio

Contribution to customer deposits by product

Customer deposits by currency

632 751 560 969

55 541 8 144 4 537 3 560

CustomerdepositsFY2016

Currentaccounts

Calldeposits

Savingsaccounts

Termdeposits

CustomerdepositsH12017

416.4 494.9 493.5 561.0 632.8

52.0%48.6%

43.7%

57.1%60.1%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

-

100.0

200.0

300.0

400.0

500.0

600.0

700.0

2013 2014 2015 2016 H1:17Deposit liabilities CASA mix

N’billion

Customer deposits grew

by 13% to close at N632.8

billion from N561.0 billion

in 2016 .

The drive to grow

transactional balances

resulted in a 20% growth

in current account

balances, while savings

account balances grew by

12% from FY 2016.

Term deposits increased

slightly by 5.5% as we

strive to de-emphasize the

growth in expensive term

deposits.

The deposit mix improved

with CASA ratio increasing

from 57% in 2016 to 60.1%

at the end of H1 2017.

LCY FCY Total

Nmillion Nmillion Nmillion

Personal & Business Banking 264,286 121,063 385,349

Current Accounts 132,060 89,351 221,411

Savings Accounts

43,167

- 43,167

Call Deposits

3,834

416 4,250

Fixed Deposits 85,225 31,296 116,522


Banking 146,357 101,045 247,402

Current accounts 63,753 51,900 115,653

Call deposits 34,775 11,422 46,197

Term deposits 47,829 37,723 85,552

Total deposits 410,643 222,108 632,751

% of total deposits 65% 35% 100%


Balance sheet – Capital and liquidity

Risk weighted assets and capital adequacy ratio

Breakdown of balance sheet funding

H1 2017

Equity13%

Deposits from customers

53%

Deposits from banks

5%

Trading liabilities

1%

Other liabilities17%

Borrowings11%

FY 2016Equity13%

Deposits from customers

50%

Deposits from banks

4%

Trading liabilities

3%

Other liabilities

21%

Borrowings9%

The group maintained

adequate capital with total

capital adequacy ratio at

22.9% (Bank: 20.2%) which

is above the regulatory

requirement of 10%.

The group’s balance sheet

was funded mainly by

deposits from customers

which accounted for 50% of

total assets.

The group’s liquidity ratio

closed at 100.24%

(Bank:90.37%) against a

regulatory minimum of

30%.

434 393 486 695 784

10.6%

17.4%16.1%

18.6% 19.2%13.9%

21.3% 20.6%22.8% 22.9%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

-

200

400

600

800

H1 2015 FY 2015 H1 2016 FY 2016 H1 2017

Risk weighted assets (N'bn) Tier 1 capital adequacy Total capital adequacy Statutory minimum


Balance sheet – Shareholder value

Return on equity

Net assets value per share and price-to-book ratio Market capitalisation

21.0%

29.6%

12.9%

18.9%

31.3%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

2013 2014 2015 2016 H1 2017

Return on Equity

1,188 1,237 1,307 1,371 1,595

2.3

1.3 1.2 1.1

2.1

0.0

0.5

1.0

1.5

2.0

2.5

0

300

600

900

1,200

1,500

1,800

H1 2015 FY 2015 H1 2016 FY 2016 H1 2017

Net asset value per share Price- to- book

kobo Times

270.0

165.3 162.0 150.0

330.0

0

50

100

150

200

250

300

350

H1 2015 FY 2015 H1 2016 FY 2016 H1 2017

N’billion

The increase in profitability

impacted positively on ROE

resulting in an increase to

31.3% from 18.9% achieved in

FY 2016.

The price-to-book ratio

appreciated on account of

increased share price resulting

from the renewed investor

confidence in Stanbic IBTC

following the release of the Q1

2017 and FY 2016 results as

well as the bullish stock market.

Consequently, Stanbic’s market

capitalization grew significantly

during the period due to the

share price appreciation.

Personal & Business

Banking (“PBB”) Babatunde Macaulay

Executive Director, Stanbic IBTC Bank PLC


Gross earnings

N29.5 billion21%

Non-Interest Revenue

N6.6 billion19%

Net Interest Income

N16.1 billion21% up

Profit Before Tax

(N5.18billion)>100%

PBB Highlight

Non-performing loans

N15.7 billion16%

Deposit liabilities

N385 billion9%

Gross loans & advances

N139 billion9%

Credit Impairment

N8.4 billion>100%

Annualized ROaE

(24.3%)(H1 2016: 6.3%)

Credit loss ratio

12.2%(H1 2016: 4.2%)

Cost to Income

85.7%(H1 2016: 78.2%)

NPL Ratio

11.3%(H1 2016: 11.5%)


PBB Financial analysis – H1 2017

Growth in net interest income on the back of favorable yield on assets

despite the decline in loan book

Decline in non-interest revenue was due to regulatory induced reduction in

transaction charges and non-recurrence of card fees from prior year due to

suspension of international transactions on the naira cards. The decline in

fees was however cushioned by increase in fees from E-banking channels

resulting from growth in transaction volumes which was supported by high

ATM uptime, robust mobile banking app and user friendly internet banking

platform.

Credit impairment charges grew by over 100% due to increase in general

provisions on the loan book and accelerated specific provisions on loans

deemed to be delinquent.

Operating expenses growth is as a result of inflation adjustment to salaries

and increased cost of running branches.

Loan book declined due to maturities at the end of the period. The business

is focused on improving the quality of loans booked, while also focusing on

recoveries. As at H1 2017, the quality of credit book of new clients has

improved which shows that the business is progressing in the right

direction.

Deposit book increased on account of significant growth in current and

savings deposit balances as we continue to focus on acquisition of low cost

deposits. The deposit growth is also due to our continued focus to acquire

the right type of customers

Performance highlights

H1 2017 Change % H1 2016

Income statement N’million N’million

Net interest income 16,134 21 13,369

Non-interest revenue 6,609 (19) 8,118

Credit impairment charges (8,421) >100 (3,362)

Operating expenses (19,501) 16 (16,754)

Profit / (Loss) before tax (5,179) >(100) 1,371

Profit / (Loss) after tax (5,240) >(100) 1,014

Balance sheet H1 2017 FY 2016

Total assets 257,933 14 227,148

Gross loans & advances 139,092 (9) 152,360

Deposit liabilities 385,349 9 353,189

Key ratios H1 2017 H1 2016

Cost-to-income (%) 85.7 78.2

Net interest margin (%) 13.4 12.1

Credit loss ratio (%) 12.2 4.2

Return on average equity (%) (24.3) 6.3


Moving forward 2017

PBB Financial analysis

PBB continues to focus on driving growth with Business Banking, particularly with the commercial banking segment, whilst

also mining the ecosystem of the existing commercial client base to deepen wallet share.

We would focus on growing NIR through increase in transaction volumes to compensate for regulatory induced reduction in

transaction charges.

The business unit is focused on continued growth in customer numbers. YTD customer growth is currently at 12%.

We continue to focus on customer experience with aim to improve service excellence and relationship management.

The business units will continue to drive cheap customer deposits to ensure reduction in cost of funds.


Banking (CIB) Demola Sogunle

Chief Executive, Stanbic IBTC Bank PLC


Gross earnings

N48.2 billion52%


N17.2 billion36%

Net Interest Income

N23.1 billion>100%

Profit Before Tax

N21.2billion>100%

CIB Highlight

Non-performing loans

N15.2 billion100%

Deposit liabilities

N247 billion19%

Gross loans & advances

N255 billion14%

Credit Impairment

N5.5 billion9%

Annualized ROaE

56%(H1 2016: 11.4%)

Credit loss ratio

4.4%(H1 2016: 4.2%)

Cost to Income

33.8%(H1 2016: 56.6%)

NPL Ratio

6.0%(H1 2016: 3.8%)


CIB Financial analysis – H1 2017

Net interest income was up by over 100% due to

favorable yields on investment securities and decline in

interest expense.

The adoption of flexible exchange rate system impacted

positively on trading revenue as FX liquidity improved.

Credit impairment charges increased by 9% as the

business accelerated the provisions on some loans.

Operating expenses grew by 10% as management

maintained a disciplined approach to cost to improve

efficiency resulting in a decline in cost-to-income ratio to

33.8% (H1 2016: 54.8%).

Loan book increased by 14% year-to-date due to a

cautious approach to lending.

Customer deposits increased by 19% as the drive to

replace expensive term deposits with transactional

deposits continues.


H1 2017 Change % H1 2016

Income statement Nmillion Nmillion

Net interest income 23,129 >100 8,070

Non-interest revenue 17,197 36 12,649

Credit impairment charges (5,532) 9 (5,088)


Profit before tax 21,167 >100 3,896

Profit after tax 20,430 >100 3,289


Total assets 983,558 25 788,450

Gross loans & advances 254,597 14 222,956

Deposit liabilities 247,402 19 207,780

Key ratios H1 2017 H1 2016

Cost-to-income (%) 33.8 58.0

Net interest margin (%) 5.3 2.0

Credit loss ratio (%) 4.4 4.2

Return on average equity (%) 52.9 11.4


Moving forward 2017

CIB Financial analysis

Focus on core clients by providing end-to-end financial services to ensure strong performance in line with Q2 2017

for second half of the year.

Continue to protect the loan book by keeping the impairment line to the barest minimum and NPL ratio below 5%

Strengthen the balance sheet ahead of 2018; growing customer deposit and Risk Asset by double digit (we have

already grown the asset book by 13% between June and July position)

Capture increased Trade and Global Market opportunities that result from the changing macro-economic

environment for long term balance sheet use.

.

Wealth

Eric Fajemisin

Chief Executive, Stanbic IBTC Pension Managers

Limited


Gross earnings

N19.4 billion30%


N16.5 billion23%

Net Interest Income

N1.8 billion26%

Profit Before Tax

N13.2billion27%

Wealth Highlight

No. of RSAs

1.55 million3%

Asset Under Mgt.

N2.4 trillion16%

Annualized ROaE

58.0%(H1 2016: 56.0%)

Cost to Income

27.8%(H1 2016: 30.9%)


Wealth financial analysis – H1 2017

Net interest income grew by 26% on account of higher

yields on financial investments.

Non-interest revenue grew by 23% due to increased

revenue from management fees as asset under

management continue to grow.

Operating expenses grew by 14%, driven by

inflationary adjustment to staff salaries, while other

operating expenses increased by 15% on the back of

increased pension protection levy and marketing

expenses.

Cost-to-income ratio improved to 27.8% at the end of

the period from 30.9% recorded in H1 2016 as

revenue grew.


H1 2017 Change % H1 2016

Income statement Nmillion Nmillion

Net interest income 1,772 26 1,410

Non-interest revenue 16,483 23 13,451


Profit before tax 13,181 27 10,415

Profit after tax 8,922 27 7,014


Total assets 32,463 (31) 47,317

Assets under management 2,417,210 16 2,076,423

Retirement savings accounts

(Nos) 1,557,888 3 1,508,040

Key ratios H1 2017 2016

Cost to income ratio (%) 27.8 30.9

Return on average equity (%) 58.0 56


Moving forward H2: 2017

Wealth financial analysis

Our clients and prospects are able to enjoy a more diverse proposition through the inclusion of Insurance brokerage in

our service offerings

Our pension business is poised in readiness to implement the directives of the guideline on the RSA multi-fund structure.

Before the end of 2017, we plan to host more employer forums for our pension clients across other locations of the

country, following the successful completion of same in four locations earlier this year.

Our Trustees’ business will consolidate on its mandate acquisition drive for lucrative transactions with worthwhile

revenues in its attempt to significantly move the dial and earn appreciable income.

We will remain accessible & continue to engage with our clients via our social media channels to provide service &

sustain interest in our end-to-end product offerings.

Guidance for H2 2017Yinka Sanni

Chief Executive, Stanbic IBTC Holdings PLC


Outlook in H2 2017

We are optimistic that credit impairments would begin to moderate during H2 2017. This should be aided

by an improvement in the business environment and growth in customer demand. On the other hand, we

expect interest rates to begin to moderate which should lead to a fall in yields on government securities.

We are nevertheless confident that the business will continue performing strongly during the course of the

rest of the year.

Headline inflation should moderate to around 15% at the end of 2017.

Areas of focus for the rest of the year are:

Cost efficiency

Improving risk asset quality

Growing low-cost deposits

Key risks to our results are:

High cost of risk

Low credit growth

Rising cost of funds


Income

Statement

Balance

sheet

Key

ratios

2017 Guidance Vs Performance

2017 Guidance H1 2017

Loan Growth 5% - 7.5% 4%

Deposit Growth 10% - 15% 13%

Non Performing Loan 5% 7.8%

CASA Ratio 60% 60.1%

Cost of Risk 4 - 6% 7.3%

Net Interest Margin 5% 7.2%

Cost to Income <50% 47.0%

Return on equity 18% - 20% 31.3%

AuM Growth (Growth) 10% 16%


Questions & Answers


Appendix


Group income statement

Change

%

H1 2017

N’million

H1 2016

N’million unauditedGross earnings 36 97,198 71,320

Net interest income 80 41,035 22,849

Interest income 55 56,728 36,713

Interest expense 13 (15,693) (13,864)

Non-interest revenue 18 40,289 34,218

Net fees and commission revenue 2 27,893 27,406

Fees and commission revenue 1 28,074 27,795

Fees and commission expense (53) (181) (389)

Trading revenue 81 11,966 6,607

Other revenue >100 430 205

Total income 43 81,324 57,067 Credit impairment charges 65 (13,953) (8,450)

Income after credit impairment charges 39 67,371 48,617 Operating expenses 16 (38,202) (32,935)

Staff costs 15 (16,492) (14,378)Other operating expenses 17 (21,710) (18,557)

Profit before taxation 86 29,169 15,682 Direct taxation 16 (5,057) (4,365)

Profit for the period >100 24,112 11,317


Group quarterly income statement

Change Q2 2017 Q1 2017 H1 2017

% N ’million N’million N’million

Gross income 7 50,176 47,022 97,198

Net interest income 17 22,155 18,880 41,035

Interest income 11 29,887 26,841 56,728

Interest expense (3) (7,732) (7,961) (15,693)

47,022 -

Non-interest revenue 0.38 20,183 20,106 40,289

Net fee and commission revenue 11 14,699 13,194 27,893

Fee and commission revenue 12 14,805 13,269 28,074

Fee and commission expense 41 (106) (75) (181)

-

Trading revenue (20) 5,315 6,651 11,966

Other revenue (35) 169 261 430

-

Total income 9 42,338 38,986 81,324

Credit impairment charges >100 (10,626) (3,327) (13,953)

Income after credit impairment charges (11) 31,712 35,659 67,371

Operating expenses 24 (21,169) (17,033) (38,202)

Staff costs 28 (9,258) (7,234) (16,492)

Other operating expenses 22 (11,911) (9,799) (21,710)

Profit before taxation (43) 10,543 18,626 29,169

Taxation 2 (2,505) (2,552) (5,057)

Profit for the period (50) 8,038 16,074 24,112


Group statement of financial position

Change

%

H1 2017

N’million

FY 2016

N’million

Assets

Cash and cash equivalents 6 318,944 301,351

Trading assets >100 85,812 16,855

Pledged assets 2 28,938 28,303

Derivative assets 85 26,490 14,317

Financial investments 19 302,056 252,823

Asset held for sale - 112 112

Loans and advances 2 376,633 368,229

Loans and advances to banks (43) 8,677 15,264

Loans and advances to customers 4 367,956 352,965

Other assets >100 103,301 39,220

Deferred tax assets (1) 8,579 8,638

Property and equipment (2) 22,467 22,962

Intangible assets (12) 628 713

Total assets 21 1,273,960 1,053,523

Equity and liabilities

Equity 15 161,465 140,798

Equity attributable to ordinary

shareholders16

159,496 137,102

Ordinary share capital - 5,000 5,000

Ordinary share premium - 65,450 65,450

Reserves 34 89,046 66,652

Non-controlling interest (47) 1,969 3,696

Liabilities 22 1,112,495 912,725Trading liabilities >100 39,225 5,325 Derivative liabilities 78 20,999 11,788 Deposit and current accounts 11 681,370 614,735

Deposits from banks (10) 48,619 53,766 Deposits from customers 13 632,751 560,969

Other borrowings (5) 91,494 96,037 Current and deferred tax liabilities 11 10,590 9,555 Subordinated debt 0 28,015 27,964 Other liabilities 63 240,802 147,321

Total equity and liabilities 21 1,273,960

1,053,523

Change

%

H1 2017

N’million

FY 2016

N’million



If you received this document in error, please immediately return the document and other related documents to Standard Bank Group /

Stanbic IBTC Holdings PLC.

On receipt of this document, you agree to be bound and are deemed to understand that:

This presentation is provided to you for information purposes only on the understanding that such information is strictly confidential. This presentation

must not be delivered or its contents disclosed to anyone other than the entity (including its employees) to which it is provided and must not be used or

reproduced, in whole or part, for any purpose other than for information.

This presentation is intended to be a commercial communication and is not to be construed as a recommendation or the constitution or solicitation of

an offer for the sale and purchase of any financial product, service, investment or security. The information, investments and/or strategies discussed in

this presentation may not be suitable for all investors and where you have any concerns you should approach an investment advisor.

We do not accept liability for any loss (direct or consequential) arising from use of this presentation. You must not rely on any communication (written

or oral) from us as investment advice, a recommendation to enter into a transaction (which includes the information and explanations related to the

terms and conditions of a transaction) or deem it to be an assurance or guarantee as to the expected results of a transaction. Investments discussed

in this presentation may fluctuate in price or value over time and past performance is not indicative of future results. While we have taken care in

preparing this presentation, we give no representation, warranty or undertaking and accept no responsibility or liability as to the accuracy or

completeness of the information set out in this presentation. This presentation does not represent an offer of funding and any facility to be granted in

terms of this presentation is subject to us obtaining the requisite internal and external approvals.

Our duties and responsibilities do not include tax advisory, legal, regulatory accounting or other specialist or technical advice or services.

You must procure and rely on independent assessments and investigations into all matters contemplated in this presentation.

© 2017 Standard Bank Group / Stanbic IBTC Holding PLC. All rights reserved.

Disclaimer

Date post:	03-Jul-2020
Category:	Documents
Upload:	others
View:	18 times
Download:	1 times

Stanbic IBTC Holdings PLC - thevault.exchange...Merged with Chartered Bank & Regent Bank and changed...

Documents