Stanbic IBTC Bank on Thursday announced full year results for the year ended December 31, 2016 with an improved 59 per cent earnings per share of N2.46 on a year on year basis.
A statement by the bank said the book value of equity per share, BVPS increased by 10.8 per cent year on year to N13.7, while annualized return on equity rose by 560 basis points, year-on-year to 18.9 per cent.
Further details of the financial report also showed the bank’s net interest margin improved by a significant margin of 160 basis points, year-on-year to 8.7 per cent.
The improvement, the report said, was driven by a 420 basis points, year-on-year increase in government securities yield to 10.7 per cent and a 250 basis points, year-on-year decline in average cost of funds to 4.1 per cent, the lowest since 2011.
Besides, net interest revenue for the year also grew by 20.1 per cent, year-on-year to N68.2billion, driven by continued strong growth in fees and commission income to N52.2billion.
“The strong growth was driven by a 78 per cent increase in retail fees to N14.3 billion and a 22 per cent, year-on-year increase in asset management fees to N28.4 billion”.
On operating efficiency, the report showed that Group cost-to-income ratio improved to 54.8 per cent, from 61.7 per cent in the previous year, as operating expenses increased by a modest 11 per cent, year-on-year to N69.1billion.
Asset quality ratios also rose during the year, with non-performing loans ratio declining from a peak of 7.1 per cent in 2015 to five per cent in 2016, against the cost of risk further increasing by 150 basis points year-on-year to 5.3 per cent, pushing the bank’s NPL cover back above 100 per cent.
“The decline in NPLs and the improvement in NPL cover potentially indicates a peak in the bank’s asset quality,” the statement said.
The report said the dispute with the Financial Reporting Council of Nigeria, which led to the suspension of the bank for alleged infractions in its “2013 and 2014 statements of financial position of the company”
Consequently, the statement said the uncertainty due to delayed reporting of earnings rather than a deterioration of underlying fundamentals necessitated the downgrade of its decision on its stock from buy to hold.
Overall, the bank said its earnings for 2016 were relatively positive, driven by continued improvements across all three of its major business segments.
The asset management business segment, it said, recorded profit after tax that increased by 23 per cent, year-on-year, while the bottom-line for its Corporate and Investment Bank was flat at N15billion as higher margins offset the continued high loan loss provisioning.
Despite increased loan loss provisioning within its retail business, the report said the loss for the segment declined significantly from KES8.6billion in 2015 to KES1.6billion in 2016.