Stanbic IBTC Posts Losses in Two Key Business Segments

Stanbic IBTC Holdings a tier-2 Nigerian lender reported losses in two of its four operating segments in its Full Year 2024 financial statement, a sign of the tough macro environment lenders are operating under.

Stanbic had four operating segments for the period, including: Business and Commercial Banking, Corporate and Investment Banking, Personal and Private Banking, and Insurance and Assets Management.

Losses of N9.4 billion and N3.04 billion were reported for the Business and Commercial Banking and Personal and Private Banking segments according to data seen by MoneyCentral.

High interest rates and inflation have exerted pressure on borrowers’ creditworthiness, particularly for corporates in non-essential consumer goods sectors and import-dependent corporates that cannot fully pass through the high cost of inflation to consumers.

Inflation has risen in Nigeria and averaged 33.5% in 2024 because of the currency depreciation, the removal of oil subsidies, and high food inflation.

Corporate and Investment Banking was the driver of earnings generating N166.35 billion in after-tax profit, while Insurance and Assets Management came a distant second with N48.2 billion in profit.

Overall Stanbic IBTC Holdings profit for the year rose by 43.7% to N202.1 billion in 2024, compared to N140.6 billion in 2023.

A major concern would be Net impairment loss on financial assets which surged by 543% to N99.36 billion in 2024 FY, compared to N15.45 billion in 2023.

S&P Global Ratings expects credit losses for Nigerian Banks will remain elevated in 2025 at about 2.5%-3.0% compared with an estimated 3.0%-3.5% in 2024.

The elevated credit losses reflect the naira currency depreciation, as foreign currency loans account for 50% of banks’ loan books on average.

Stanbic IBTC capital adequacy ratio fell to 13.18% under Basel II and 13.32% under Basel III guidelines in 2024. This compared to 15.9% and 16% in 2023 respectively.

The Central Bank of Nigeria (CBN) requires banks to maintain a minimum capital adequacy ratio (CAR) of 10% for banks with national or regional authorization, and 15% for banks with international authorization.

The CBN also has a 11% minimum regulatory requirement for Nigerian domestic universal Banks like Stanbic IBTC, under Basel III.