The board and management of Stanbic IBTC Holdings Plc may have to return to the drawing board for a second look at its strategy for 2021 operations, judging by the Q1 earnings report for the period showing that the group lost some ground to the competition, as seen in the 25.54% drop in gross earnings and even more significant 45.36% nosedive in net profit for the period. That expectedly impacted on Earnings Per Share for the period ended March 31, 2021, as it fell from N1.91 to N0.98.
The biggest drop in income for the period came from trading revenue, which tumbled by N11.194bn, or 77.64%; the impact of which, among others, was substantially mitigated by the 76.75% reduction in income tax expense during the period.
According to the result submitted through the Nigerian Exchange (NGX), gross earnings fell by N15.692bn to N45.726bn, with interest income contributing N21.041bn, a drop from N27.459bn; while interest expense dropped to N5.154bn from N8.042bn, resulting in net interest income of N15.86bn, down from N18.517bn.
Non-interest review dropped by N9.556bn or 29.27% from N32.639bn to N23.083bn; driven by the fee and commission review of N22.441bn, a marginal increase from N19.228bn; just as fee and commission expense stood at N1.629bn, from N1.32bn; resulting in net fee and commission revenue of N20.812bn, up from N17.908bn.
Trading revenue tumbled to N3.223bn from N14.417bn in the corresponding period of 2020, bringing total income for the period to N38.943bn, down from N51.156bn. A breakdown of this numbers showed that the lion’s share came from the wealth segment, which accounted for N15.045bn, up from the previous N12.734bn; followed by the N14.54bn from corporate & investment banking, a decline from N28.308bn; while personal & business banking N10.314bn, from N11.244bn in the corresponding period of 2020.
The group recorded a net write-back on financial assets of N156m, as against the net impairment loss of N1.967bn; following which income after credit impairment charges stood at N39.098bn, as against the preceding first quarter’s N49.19bn.
Operating expenses stood at N26.956bn, up from N24.776bn, with other operating expenses accounting for N17.476bn from N14.862bn; as staff cost dropped marginally fro9m N9.914bn to N9.48bn.
Profit before tax, therefore, fell from N24.413bn in the 2020Q1 to N12.142bn; as income tax reduction from N3.812bn to N886m, resulting in net profit of N11.256bn from N20.601bn in the previous Q1.
