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 Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange rallied by 1.70 per cent on Thursday, June 25, after three price gainers overpowered the two price losers recorded at the close of business.
Consequently, the market capitalisation of the trading platform increased by N43.79 billion to N2.618 trillion from N2.574 trillion, and the NASD Security Index (NSI) improved by 72.96 points to close at 4,362.32 points, in contrast to Wednesday’s 4,289.36 points.
Yesterday, the price advancers were led by Nipco Plc, which chalked up N31.79 to close at N349.76 per unit versus the preceding day’s N317.97 per unit. Okitipupa Plc gained N18.00 to end at N298.00 per share versus the previous session’s N280.00 per share, and Central Securities Clearing System (CSCS) Plc went up by N7.11 to N86.79 per unit from N79.68 per unit.
On the flip side, Nitrox Industrial Gases Plc crumbled by 32 Kobo to close at N21.09 per share compared with the N21.41 per share it closed at midweek, and Food Concepts Plc depreciated by 25 Kobo to N2.51 per unit from N2.76 per unit.
During the session, the value of securities traded by investors went down by 86.7 per cent to N10.9 million from the preceding session’s N82.9 million, and the volume of securities dropped 84.9 per cent to 10.9 million units from the previous 82.9 million, while the number of deals grew by 84.2 per cent to 35 deals from 19 deals.
At the close of trades, Great Nigeria Insurance (GNI) Plc remained the most traded stock by value on a year-to-date basis, with 3.4 billion units sold for N8.4 billion, trailed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units valued at N6.5 billion, and CSCS Plc with 68.4 million units exchanged for N4.7 billion.
GNI Plc was also the most traded stock by volume on a year-to-date basis, with 3.4 billion units worth N8.4 billion, followed by Infracredit Plc with 2.3 billion units traded for N6.5 billion, and Resourcery Plc with 1.1 billion units transacted for N415.7 million.
By Dipo Olowookere
The Nigerian Exchange (NGX) Limited further suffered a 0.64 per cent decline on Thursday as the bears tightened their grip on the bourse.
For the second straight session, all the key sectors of Customs Street pointed south, with the energy counter down by 5.22 per cent. The insurance index slumped by 2.59 per cent, the banking space depreciated by 0.28 per cent, and the consumer goods segment moderated by 0.06 per cent, while the industrial goods sector was flat, though with a marginal fall.
As a result, the All-Share Index (ASI) contracted by 1,493.71 points to 233,580.83 points from 235,074.54 points, and the market capitalisation retreated by N959 billion to N149.888 trillion from N150.847 trillion.
Investor sentiment remained weak after a negative market breadth index, as there were 21 price gainers and 34 price losers.
Aradel and Deap Capital went down by 10.00 per cent each to N1,575.00 and N4.05, respectively. Trans-Nationwide Express fell by 9.90 per cent to N3.64, Regency Alliance slipped by 9.57 per cent to N85 Kobo, and C&I Leasing dipped by 9.48 per cent to N28.12.
Conversely, Red Star Express grew by 9.60 per cent to N24.55, Legend Internet expanded by 9.09 per cent to N6.00, Neimeth appreciated by 7.10 per cent to N8.30, Abbey Mortgage Bank rose by 5.45 per cent to N8.70, and Ellah Lakes improved by 4.65 per cent to N9.00.
Yesterday, market participants traded 393.7 million equities valued at N19.2 billion in 45,813 deals compared with the 488.1 million equities worth N20.9 billion transacted in 46,239 deals recorded a day earlier, implying a shortfall in the trading volume, value, and number of deals by 19.34 per cent, 8.13 per cent, and 0.92 per cent, respectively.
The most active stock for the session was Access Holdings with a turnover of 39.1 million units worth N896.2 million, Chams traded 24.5 million units valued at N96.5 million, Fidelity Bank sold 24.1 million units for N436.9 million, Sterling Holdings exchanged 23.8 million units valued at N182.2 million, and Zenith Bank transacted 18.9 million units worth N2.1 billion.
By Adedapo Adesanya
The Naira recorded a marginal gain of 43 Kobo or 0.03 per cent against the United States Dollar on Wednesday, June 25, in the Nigerian Autonomous Foreign Exchange Market (NAFEX) to sell for N1,380.11/$1 compared with the previous day’s N1,380.54/$1.
However, the Nigerian currency lost N3.21 against the Pound Sterling in the official market during the session to close at N1,818.84/£1, in contrast to Wednesday’s exchange rate of N1,815.63/£1, and against the Euro, it fell by N3.21 to trade at N1,566.84/€1 versus midweek’s value of N1,563.63/€1.
In the same vein, the Nigerian Naira depreciated against the Dollar at the GTBank FX deck yesterday by N3 to sell for N1,383/$1 compared with the preceding session’s value of N1,380/$1, and at the black market window, it remained unchanged at N1,395/$1.
Interbank FX turnover at the NFEM window surged by about 56 per cent day-on-day to close at $195.371 million from $125.588 million reported on Wednesday, according to data from the Central Bank of Nigeria (CBN).
The Naira continues to feel the impact of rising FX payments and a strong US Dollar amid a sharp slowdown in forex market interventions by the central bank, with more than six weeks of no support for the local currency.
Nigeria’s foreign reserves increased further to $51.142 billion, while oil prices continue to be held in the $70 range by developments in the geopolitical scene.
Meanwhile, in the cryptocurrency market, Bitcoin sank below $60,000 as more than $1 billion in crypto positions were liquidated over the past 24 hours, with longs accounting for $842 million of the damage. About 148,500 traders were wiped out. The largest single position was a $38 million bitcoin-dollar bet on Hyperliquid. It led at $489 million in liquidations and dropped 2.8 per cent to sell at $59,862.61.
Ethereum (ETH) crashed by 5.5 per cent to $1,554.57, Ripple (XRP) declined by 4.8 per cent to $1.03, Cardano (ADA) fell by 4.3 per cent to $0.1433, Dogecoin (DOGE) dropped 3.4 per cent to sell at $0.0745, TRON (TRX) slid 2.2 per cent to $0.3215, Binance Coin (BNB) slumped by 1.8 per cent to $561.34, and Solana (SOL) dipped by 0.3 per cent to $62.94, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) sold flat at $1.00 each.
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