Stanbic IBTC Holdings Plc has announced 50.1 per cent drop in profit for half year ended June 30, 2021 amid weak gross earnings and hike in total operating expenses.

The Group profit for H1 2021 dropped to N22.54billion as against N45.2billion reported in H1 2020.

Stanbic IBTC Holdings in its audited result and accounts released to the Nigerian Exchange Limited (NGX) yesterday also reported 52.,9 per cent drop in profit before tax to N24.71billion in H1 2021 from N52.41billion reported in H1 2020.

Despite reporting drop in profits, the management proposed interim dividend of N1.00per ordinary share of 50 kobo each, that is, N12.96 billion.

From the profit & loss figures, the group gross earnings dropped by 26 per cent to N93.59billion in H1 2021 from N126.57billion in H1 2020.

From the balance sheet position, the group total assets decreased by two per cent to N2.43 trillion as at June 30, 2021 from N2.49 trillion reported in full year ended December 31, 2020.

As Gross loans & advances up 21 per cent to N790.6 billion as at June 30, 2021 from N655.3 billion in 2020 FY, Customer deposits increased by 17 per cent to N958.4 billion from N819.9 billion in 2020 FY.

Deposit mix deteriorated to 73.4% (December 2020: 82.8per cent) of current-and savings-accounts deposits to total deposits

The group’s Non-performing loans decreased by four per cent to N25.5 billion (December 2020: N26.5 billion) to drag Non-performing loan to total loan ratio of 3.2 per cent from four per cent reported in 2020 FY.

The Chief Executive Stanbic IBTC Holdings, Dr Demola Sogunle in a statement said: “The private sector activities improved during the first half of 2021 following the easing of restrictions in the later part of last year. The Stanbic IBTC Purchasing Managers’ Index remained above the 50 mark throughout the period, indicating expansion in business activities.

“We also saw interest rates improve significantly in the second quarter, which drove activities in the fixed income market. That said, headline inflation remained high, constraining consumer purchasing power.

“The improvement in business activities positively impacted our performance in the second quarter. This improvement meant that we optimized opportunities to support our customers through lending.

“We empowered over 130,000 customers through our digital lending, with N40billion loans disbursed. We recorded an improvement in the quality of COVID-19 restructured loans, as we saw majority of the affected customers make good on their loan repayment commitments. The increase in customer loans coupledwith the uptick in yields translated into the 10% quarter-on-quarter (QoQ) growth in interest income. On the flipside, the uptick in interest rates caused interest expense to rise by 20per cent QoQ. In the end, net interest income increased by seven per cent QoQ while noninterest revenue moderated slightly QoQ. Our loan recovery efforts yielded further impairment write-back in the second quarter.

“Our Corporate and Investment Banking business recorded improved business activities in the second quarter relative to the first quarter of 2021 while both the Personal and Business Banking and Wealth’s profitability moderated QoQ due to increased expenses associated with accelerated activities during the period as against muted activities in prior year. AMCON charges grew by 32per cent year-on-year.”

He expressed that the bank remains focused on long term value creation for stakeholders, as it launched the Stanbic IBTC Infrastructure Fund under asset management business.

He explained further that: “The Fund is a close-ended unit trust scheme that is designed for institutional investors such as Pension Fund Administrators, insurance companies, asset managers and high-networth individuals. In addition to that, we added a new feature – OnePass, to our Super App. This feature allows our customers access our variety of financial services with one single password, in line with our passion to enhance convenience for our customers.”

On interim dividend, he said : “We declared 100 kobo interim dividend in line with our commitment to rewarding our shareholders. We also continued to invest in the communities that we serve in the form of donations, grants, and Corporate Social Investments during H1 2021.

“This included donation towards the renovation of damaged police stations, grants for the refurbishment of some businesses that were impacted by the #ENDSARS Unrest; donations toward other causes such as the Lagos MSME Recovery Fund and the Abuja Disabled Peoples Home, amongst others. We remain committed to supporting our stakeholders and the wider communities.

“We recognize that the domestic economic environment remains challenging given that the country is currently facing a third wave of the pandemic. As a responsible institution, we are observing the relevant safety protocols to protect our employees, clients, and communities at large. We have activated the third level of our business continuity plans as part of our immediate response measures.

“Over the rest of the year, we are focused on serving the needs of our customers in an innovative manner as well as creating and implementing strategic initiatives that would further enhance long term value creation for our shareholders.”

The group in a statement noted that its total Capital Adequacy Ratio closed at 22.5 per cent in H1 2021 (Bank: 17.1per cent) which is significantly higher than the 10 per cent minimum regulatory requirement.

The Group maintained a strong and diversified funding base during the H1 2021. The Group’s liquidity ratio was above the regulatory minimum requirement of 30per cent , which indicates the Group’s sound position to continue meeting its liquidity obligations in a timely manner.