Economy
Stanbic IBTC Sustains Strong, Diversified Funding Base in Q1 2021
By Dipo Olowookere
Despite the unfriendly business environment caused by the COVID-19 pandemic, Stanbic IBTC Holdings Plc has continued to stay strong as a result of the futuristic strategies put in place by the board and management.
In the first quarter of 2021, the financial group maintained an adequate level of capital, with the total capital adequacy ratio closing at 22.7 per cent, significantly higher than the 10 per cent minimum requirement of the Central Bank of Nigeria (CBN), the industry’s regulatory agency.
Also, its liquidity ratio was above the regulatory minimum requirement of 30 per cent, signifying Stanbic IBTC’s sound position to continue meeting its liquidity obligations in a timely manner.
In the period under review, the total assets increased by 3 per cent to N2.569 trillion from N2.486 trillion in the full year of 2020, while the customer deposits rose by 6 per cent to N867.0 billion in Q1 2021 from N819.9 billion in FY 2020, with the gross loans and advances up 16 per cent to N762.7 billion from N655.3 billion in December 2020 and the non-performing loans (NPLs) jumping by 3 per cent to N27.2 billion from N26.5 billion as of December 31, 2020.
Sadly, the gross earnings reduced by 26 per cent to N45.7 billion from N61.4 billion in the first quarter of last year just as the net interest income decreased by 14 per cent to N15.9 billion from N18.5 billion, with the non-interest revenue down by 29 per cent to N23.1 billion N32.6 billion in the same period of 2020 and the total operating income down by 24 per cent to N38.9 billion from N51.2 billion.
Further, the profit before tax reduced by 50 per cent to N12.1 billion from N24.4 billion, while the profit after tax went down by 45 per cent to N11.3 billion from N20.6 billion, with the cost to income ratio at 69.2 per cent as against 48.4 per cent in Q1 of 2020 and the annualised return on average equity at 11.6 per cent.
The CEO of Stanbic IBCT, Mr Demola Sogunle, while commenting on the results, blamed the decline in the company’s profitability on pressure on trading income as trading activities slowed down while rising operating expenses from regulatory induced charges did not help matters amid continued pressure on risk asset yields.
However, he emphasised that the decline was partly cushioned by the year-on-year improvement in net fee and commission revenue as well as an impairment write-back of N155 million in Q1 2021 compared to the charge of N1.97 billion in the prior year.
He explained that the impairment write-back was due to releases and after write-off recoveries achieved during the quarter.
“Again, the diversity of our earnings proved supportive during the period. Wealth’s profitability improved from the prior period and provided succour for the contraction in the profitability of the Corporate and Investment Banking and the Personal and Business Banking businesses,” he disclosed.
Mr Sogunle expressed optimism that the company will achieve “our full-year 2021 guidance,” especially with the commencement of the firm’s latest addition, Stanbic IBTC Insurance Limited, in the first quarter of the year.
By Modupe Gbadeyanka
The federal government has been asked by the Nigerian Bar Association (NBA) to suspend the implementation of the controversial tax laws.
In a reaction to the tax reform acts, the president of the group, Mr Afam Osigwe (SAN), the suspension of the laws would allow for a proper investigation into allegations of alterations in the gazetted and harmonised copies.
A member of the House of Representatives, Mr Abdussamad Dasuki, alleged that some parts of the laws passed by the parliament were different from the gazetted copy.
To address the issues raised, the NBA said it is “imperative that a comprehensive, open, and transparent investigation be conducted to clarify the circumstances surrounding the enactment of the laws and to restore public confidence in the legislative process.”
“Until these issues are fully examined and resolved, all plans for the implementation of the Tax Reform Acts should be immediately suspended,” the association declared.
It noted that the controversies “raise grave concerns about the integrity, transparency, and credibility of Nigeria’s legislative process.”
“These developments strike at the very heart of constitutional governance and call into question the procedural sanctity that must attend lawmaking in a democratic society,” it noted.
“Legal and policy uncertainty of this magnitude has far-reaching consequences. It unsettles the business environment, erodes investor confidence, and creates unpredictability for individuals, businesses, and institutions required to comply with the law. Such uncertainty is inimical to economic stability and should have no place in a system governed by the rule of law.
“Nigeria’s constitutional democracy demands that laws, especially those with profound economic and social implications, emerge from processes that are transparent, accountable, and beyond reproach. Anything short of this undermines public trust and weakens the foundation upon which lawful governance rests.
“We therefore call on all relevant authorities to act swiftly and responsibly in addressing this controversy, in the overriding interest of constitutional order, economic stability, and the preservation of the rule of law,” the organisation stated.
By Adedapo Adesanya
Demand for hot stocks, including MRS Oil Plc, buoyed the NASD Over-the-Counter (OTC) Securities Exchange by 0.52 per cent on Tuesday, December 23.
The energy company was one of the three price gainers for the session as it chalked up N19.69 to sell at N216.59 per share versus the previous day’s value of N196.90 per share.
Further, FrieslandCampina Wamco Nigeria Plc gained N2.95 to close at N56.75 per unit versus N53.80 per unit and Golden Capital Plc appreciated by 84 Kobo to N9.29 per share from Monday’s N8.45 per share.
Consequently, the market capitalisation went up by N10.95 billion to N2.125 trillion from N2.125 trillion and the NASD Unlisted Security Index (NSI) rose by 18.31 points to 3,570.37 points from 3,552.06 points.
Yesterday, the NASD bourse recorded a price loser, the Central Securities Clearing System Plc (CSCS), which gave up 17 Kobo to close at N33.70 per unit against the previous trading value of N33.87 per unit.
The volume of securities traded at the session went down by 97.6 per cent to 297,902 units from the previous day’s 12.6 million units, the value of securities decreased by 98.5 per cent to N10.5 million from N713.6 million, and the number of deals remained flat at 32 deals.
By value, Infrastructure Credit Guarantee Company (InfraCredit) Plc ended as the most actively traded stock on a year-to-date basis with 5.8 billion units exchanged for N16.4 billion. This was followed by Okitipupa Plc, which traded 178.9 million units valued at N9.5 billion, and MRS Oil Plc with 36.1 million units worth N4.9 billion.
In terms of volume, also on a year-to-date basis, InfraCredit Plc led the chart with a turnover of 5.8 billion units traded for N16.4 billion. Industrial and General Insurance (IGI) Plc ranked second with 1.2 billion units sold for N420.7 million, while Impresit Bakolori Plc followed with the sale of 536.9 million units valued at N524.9 million.
By Dipo Olowookere
It was another bullish trading session for the Nigerian Exchange (NGX) Limited as it closed higher by 0.59 per cent on Tuesday.
The market further rallied due to continued interest in large and mid-cap stocks on the exchange by investors rebalancing their portfolios for the year-end.
Yesterday, Aluminium Extrusion sustained its upward trajectory after it further appreciated by 9.96 per cent to N14.90, as Austin Laz gained 9.81 per cent to close at N2.91, Custodian Investment improved by 9.69 per cent to N38.50, and First Holdco soared by 9.35 per cent to N50.30.
Conversely, Royal Exchange declined by 7.22 per cent to N1.80, Champion Breweries shrank by 6.57 per cent to N15.65, NASCON lost 5.36 per cent to trade at N105.05, Sovereign Trust Insurance depreciated by 5.28 per cent to N3.77, and Japaul went down by 4.51 per cent to N2.33.
At the close of business, 29 shares ended on the gainers’ table and 27 shares finished on the losers’ log, representing a positive market breadth index and bullish investor sentiment.
This raised the All-Share Index (ASI) by 895.06 points to 153,354.13 points from 152,459.07 points and lifted the market capitalisation by N579 billion to N97.772 trillion from the previous day’s N97.193 trillion.
VFD Group finished the day as the busiest stock after it recorded a turnover of 192.0 million units worth N2.1 billion, GTCO exchanged 63.5 million units valued at N5.6 billion, Access Holdings traded 49.8 million units for N1.0 billion, First Holdco sold 45.8 million units valued at N2.3 billion, and Secure Electronic Technology transacted 38.3 million units worth N28.4 million.
In all, market participants bought and sold 677.4 million units valued at N20.8 billion in 27,589 deals compared with the 451.5 million units worth N13.0 billion traded in 33,327 deals on Monday, showing an improvement in the trading volume and value by 50.03 per cent and 60.00 per cent apiece, and a shortfall in the number of deals by 17.22 per cent.
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