Stanbic IBTC Holdings Sees Significant Profit Surge Due to High Interest Rate

Stanbic IBTC Holdings Plc reported record profit in the second quarter as the tailwind from interest rates continues to lend support to the largest Tier lender in the country.

Net interest income — or the difference Stanbic IBTC earns from lending and pays for deposits — surges by 139.80 percent to N174.29 billion for the first six months through June, it said on Tuesday.

The central bank’s aggressive monetary policy which aims to rein in inflation and spur foreign investment has helped propelled the earnings of banks who packed a lot of money in fixed income securities that generate reasonable returns or yield.

The Apex bank has hiked the monetary policy rate (MPR) to 26.75 percent as inflation that is waging war on Nigerians stands at an all-time high of 33.40 percent.

Stanbic IBTC also benefited from the sudden devaluation of the currency which added strength to the bottom line (profit) that spiked by 71.30 percent to N116.35 billion as at June 2024.

Return on average equity (ROAE) rose to 42.60 percent in the period under review from 32.50 the previous year.

It is noteworthy that income is rising faster than cost as cost to income ratio reduced to 42.80 percent in June 2024 from 48.10 percent as at June 2023.

With an excellent risk management strategy and efficient portfolio allocation across key sectors, Stanbic IBTC’s non-performing loans (NPLs) of 3.60 percent is below the 5 percent regulatory threshold.