Stanbic IBTC Holdings PLC - The Vault...H1 2015 H1 2016 H1 2017 H1 2018 H1 2019 22,135 22,849 41,035...

Stanbic IBTC Presentation / page 1 /

Stanbic IBTC Holdings PLCH1 2019 Financial Results Presentation

August 2019


1 2 3 4 5

Background and the

operating environment

Financial review: H1 2019

Business unit results

Outlook & Guidance for

2019

Appendix

Slide 3 Slide 7 Slide 21 Slide 36 Slide 40

Table of Content

Background and the operating environment


We measure our progress using five strategic value drivers

Mission

Vision

Committed to solutions that drive your progress.

To be the leading end-to-end financial solutions provider in Nigeria through innovativeand customer focused people.

In executing our group strategy our key focus areas are

Digitisation

Integration

Client centricity Do valuable things for clients

Digitise front to back

Seamlessly deliver relevant,

holistic solutions

SEE = Social, economic and environmental

Strategic focus is unchanged


Stanbic IBTC: Nigeria’s leading financial services group

AAA(nga)

B/stable/B(Bank)

AA(ng)(Bank)

2.46 million Banking

Customers

9,710 POS

176 Branches

24 BNAs&

653 ATMs

N3.48trnAuM

1.71 million RSAs

N6.96trnAuC

2,834 employees

1,206 (43%)

1,628 (57%)12 Mutual

funds

No. 1 FX Liquidity Provider

i-Support Fund,Together4aLimb

andEducational,

Health & economic empowerment

CSI Projects

Launched Digital Lending

EZ Cash

Best Investment

Bank 2018

Employee Net Promoter Score

of +46&

Emotional Promoter Score of +79


Reserves, Brent Crude Oil Price & Crude Oil Production

Inflation (%)

Interest Rates

Exchange Rate Movement

❖The external reserves grew steadily reaching $45billion in June 2019 from $43 billion at the end of2018 following the massive inflows of USD liquiditypost the elections. However, we have seen somepressure in recent times though largely subdued bysustained FX intervention by the Central Bank ofNigeria (“CBN”).

❖Brent crude oil prices averaged $66/bbl in H1 2019;lower than the $71/bbl average recorded during thesame period last year. Oil production has seen someglitches in H1 2019 and more so with the OPEC cutsthat took effect in December 2018.

❖Yields came off considerably around the secondquarter partly due to increased demand andreduction in OMO auctions from the CBN.

❖Headline inflation was mostly sticky in H1 2019(averaging 11.32%) owing to elevated food inflation.Inflation declined to 11.08% y/y in July 2019 from11.44% y/y in December 2018.

❖The USD/NGN rate saw some degree of appreciationin H1 2019 to around N361 levels from N364 inDecember 2018. The significant portfolio flowsrecorded during the period supported the exchangerate stability.

❖The Equity market remained bearish, declining by4.9% in H1 2019 amid the discouraging macro-economic backdrop.

Source: IMF/NBS/CBN/BMI

Macro-economic and operating environment

0%

5%

10%

15%

20%

25%

30%

Average inter-bank call rate Tbills - short term

Tbills - medium term Tbills - long term

Bond - 3 year

280

290

300

310

320

330

340

350

360

370

380N

GN

/ U

SD r

ate

CBN Parallel market NAFEX I&E FX Window

1.55

1.6

1.65

1.7

1.75

1.8

1.85

-

20

40

60

80

100

Jul-

18

Au

g-1

8

Sep

-18

Oct

-18

No

v-1

8

Dec

-18

Jan

-19

Feb

-19

Mar

-19

Ap

r-1

9

May

-19

Jun

-19

Jul-

19

Reserves (US$ billions)Brent Crude oil (US$).Month end priceCrude oil production (million bpd)

11.14

11.23 11.28

11.26

11.28

11.4411.37

11.31

11.25

11.3711.40

11.22

11.08

BLUE DIVIDERFinancial review: H1 2019


51.9

53.2

H1 2018

H1 2019

%

43.3

28.5

H1 2018

H1 2019

%

Summary of H1 2019 Performance – Income Statement items

Gross Earnings

H1 2019: N117.4bnH1 2018: N114.2bn

Basic Earnings Per Share

H1 2019: 342KoboH1 2018: 416Kobo

Profit After Tax

H1 2019: N36.2bnH1 2018: N43.1bn

Credit Loss RatioCost to IncomeROE

+3% -18% -16%

-2.6

-0.2

H1 2018

H1 2019

%


56.8

68.9

FY 2018

H1 2019

%

Summary of H1 2019 Performance – Financial Position items

Customer Deposits

H1 2019: N693.5bnFY 2018: N807.7bn

Net Customer Loans & Advances

H1 2019: N455.1bnFY 2018: N432.7bn

CASA Ratio Gross NPL Ratio (IFRS)ROA

-3% -14% +5%

Total Asset

H1 2019: N1.619trnFY 2018: N1.664trn

4.8

4.5

FY 2018

H1 2019

% %

3.86

3.91

FY 2018

H1 2019


59,924

19,755

53,828

5,50848,775

50,7307,646

43,084

Interest income Interest expense Non-interestrevenue

Credit impairmentcharges

Operatingexpenses

Profit beforetaxation

Taxes Profit aftertaxation

H1 2018

Overview of income statement for H1 2019 vs H1 2018

60,784

21,474

54,852

557

50,069

44,650 8,40536,245

Interest income Interest expense Non-interestrevenue

Credit impairmentcharges

Operating expenses Profit beforetaxation

Taxes Profit after taxation

H1 2019


Net Interest Income

❖ Net interest income was down by 2% to N39.3 billion (H1 2018: N40.2billion) though interest income was up by 1% to N60.8 billion (H12018: N59.9 billion) but the 9% growth in interest expense led to theNII decline.

❖ Consequently, net interest margin declined as a result of liquiditysqueeze and reduced financial investment portfolio due to increasedexcess Cash Reserve asset.

❖ Cost of funds rose due to increased funding to finance our assetsbook. We will continue to take deliberate actions to replace expensiveterm deposit with cheaper deposit liabilities.

Interest Expense

Interest Income

19,583 13,864 15,693 19,755 21,474

H1 2015 H1 2016 H1 2017 H1 2018 H1 2019

22,135 22,849 41,035 40,169 39,310

H1 2015 H1 2016 H1 2017 H1 2018 H1 2019

Net Interest Income

41,718 36,713 56,728 59,924 60,784

H1 2015 H1 2016 H1 2017 H1 2018 H1 2019

Drivers of net interest income (%)

16.2 16.6 15.8

12.0 12.8

4.0 4.3 4.0 3.7 5.2

7.2 6.9 5.9

5.2 4.9

H1 2017 FY 2017 H1 2018 FY 2018 H1 2019

Asset Yield Cost of fund NIMs


Non-Interest Revenue

❖ Non-interest revenue grew by 2% drivenby a 10% increase in trading income and10% growth in other revenue, whichcontained the impact of 2% year on yeardecline in net fees and commission.

❖ Electronic banking fees were up 71%year-on-year.

Break-down of fees and commission income

26,346 34,218 40,289 53,828 54,852

0.85

1.04 1.05

1.10 1.10

0.70

0.75

0.80

0.85

0.90

0.95

1.00

1.05

1.10

1.15

-

10,000

20,000

30,000

40,000

50,000

60,000

H1 2015 H1 2016 H1 2017 H1 2018 H1 2019

Non-interest revenue NIR to OPEX ratio

Break down of non-interest revenue by type

H1 2015 H1 2016 H1 2017 H1 2018 H1 2019

2% 1% 1% 2% 2%

27%19%

30% 30% 31%

71%80%

69% 68% 67%

Other revenue Trading revenue Net Fees and commission income

1,975 1,811 4,980

20,177

1,890 1,505 3,415

1,270 684 1,815 1,623 4,129 21,151 2,088 880 3,510 1,170 776

Accounttransaction fees

Card basedcommission

Brokerage andfinancial

advisory fees

Assetmanagement

fees

Custody fees Electronicbanking fees

Foreigncurrency service

fees

Documentationand

administrationfees

Others

H1 2019 H1 2018


Income statement - credit impairment

❖Credit impairment charges were a write back of N557mn compared to N5.51bn in the previous period as we continue to explore our recoveryefforts and strategy.

❖Credit loss ratio was (0.2%) compared to (2.6%) in H1 2018.

(7,889) (8,450) (13,953)

5,508 557 3.8

4.3

7.3

(2.6)

(0.2)

(4.0)

(2.0)

0.0

2.0

4.0

6.0

8.0

(15,000)

(10,000)

(5,000)

-

5,000

10,000

H1 2015 H1 2016 H1 2017 H1 2018 H1 2019

Credit Impairment charge Credit loss ratio

N 'million %


Operating expenses and Taxation

❖Operating expenses increased by 3% year-on-year.

❖Staff cost declined by 7% year-on-year due to decline inshare-based compensation charges on the back of declinein the company’s share price.

❖Other operating expenses increased by 10% mainly as aresult of growth in information technology cost, AMCONcharges and deposit insurance premium on customerdeposits.

❖Consequently, Cost to income ratio rose to 53.2% from51.9% recorded in prior year.

❖Effective tax rate increased to 18.8% from 15.1% in H1 2018due to assessment of the Banking subsidiary to dividend taxbasis versus minimum tax basis in H1 2018.

31,045 32,935 38,202 48,775 50,069

64.0%

57.7%

47.0%

51.9% 53.2%

40%

50%

60%

70%

80%

-

10,000

20,000

30,000

40,000

50,000

60,000

H1 2015 H1 2016 H1 2017 H1 2018 H1 2019

Operating expenses Cost-to -income ratio

N 'million

(158)

4,365 5,057 7,646 8,405 (1.7%)

27.8%

17.3%15.1%

18.8%

-5%

0%

5%

10%

15%

20%

25%

30%

(2,000)

-

2,000

4,000

6,000

8,000

10,000

H1 2015 H1 2016 H1 2017 H1 2018 H1 2019

Taxation Effective tax rate

N ‘million


Total Assets

❖ Return on asset declined due to lower earnings

H1 2017 FY 2017 H1 2018 FY 2018 H1 2019

26% 30% 26% 28% 29%

11%15% 17% 15% 19%

24%23% 22% 24% 17%

29%27% 29% 26% 28%

11% 6% 6% 7% 7%

Cash & loans to banks Trading, Pledged & derivative assets

Financial investments Loans & advances to customers

Other assets

1,619,278

461,314

94,278218,048

267,468

455,07593,538 25,608

Total Assets Cash & loans tobanks

Trading andderivative assets

Pledged assets Financialinvestments

Loans & advancesto customers

Other assets Intangible assets,property &equipment

N ‘million

N 'million

1,274 1,386 1,373 1,664 1,619

4.3%3.8%

6.4%4.8% 4.5%

0.0%

2.0%

4.0%

6.0%

8.0%

-

200

400

600

800

1,000

1,200

1,400

1,600

1,800

H1 2017 FY 2017 H1 2018 FY 2018 H1 2019

Total Assets Return on average assets


N ’billionContribution to loans and advances by product

❖Gross loans portfolio increased by 5% year-to-date though we witnessed somematurities.

❖ Installment sales, finance leases andmortgage loans declined as a result ofmaturities and muted sales in the year.

❖ Increases in term loans and overdraftswere due to pick-up in economic activitiesand drive to grow loans in non-cyclicalsectors

H1 2019

LCY loans FCY loans Total loans N ’billion N ’billion N ’billion

Personal & Business Banking 152.6 29.5 182.05 Mortgage 5.0 - 5.0 Instalment sale & finance leases 7.25 0.79 8.04

Overdrafts 27.5 2.9 30.4

Term loans 112.9 25.7 138.6 Corporate & Investment Banking 139.6 158.1 297.6

Term loans 82.5 158.1 240.5Overdrafts 56.12 0.1 56.1Instalment sale and finance lease 0.99 - 0.99 Total loans 292.2 187.5 479.7

61% 39% 100%

FY 2018

LCY loans FCY loans Total loans

N ‘billion N ‘billion N ‘billion

139.4 40.4 179.8

5.6 - 5.6

7.9 0.8 8.7

28.8 2.9 31.6

97.2 36.8 134.0

104.3 174.9 279.1

67.6 174.9 242.5

35.5 - 35.5

1.1 - 1.1

243.7 215.3 459.0

53% 47% 100%

458,946

( 797 ) ( 791 ) 19,663 2,652

479,673

Gross loansand

advances -FY 2018

Mortgagelending

Installmentsales andfinanceleases

Overdrafts Term loans Gross loansand

advances -H1 2019

393.7 403.9 439.9 458.9 479.7 0

100

200

300

400

500

H1 2017 FY 2017 H1 2018 FY 2018 H1 2019

Gross loans and advances

Loans and Advances

50.39%

48.22%

51.75%

Jun-18 Dec-18 Jun-19

LDR (CBN view)


Loans and Advances by Sector

Agriculture8.2% Communications

1.8%Construction and

real estate9.5%

Consumer credit11.2%

Finance & Insurance

0.3%

General commerce

10.0%

Government7.1%

Manufacturing35.5%

Oil & Gas Downstream 6.7%

Oil & gas services2.3%

Oil & Gas Upstream

6.4%

Transportation1.0%Agriculture

6.5% Communications7.6%

Construction and real estate

9.1%

Consumer credit10.8%

Finance & Insurance

0.2%

General commerce

8.4%

Government5.6%

Manufacturing28.1%

Oil & Gas Downstream

10.9%

Oil & gas services4.0%

Oil & Gas Upstream

7.9%

Transportation0.8%

H1 2019 FY 2018


Balance sheet – Loan performance Non-performing loans and NPL ratio (IFRS) Non-performing loans ratio by sector (IFRS)

Non-performing loans by currency (N ’million) (IFRS)

30.9 35.3 37.7 17.7 18.8

7.8%8.6% 8.6%

3.9% 3.9%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

-

10.0

20.0

30.0

40.0

H1 2017 FY 2017 H1 2018 FY 2018 H1 2019

Non-performing loans NPL/ total loans

N ‘billion H1 2019 FY 2018

Sector% of Total

NPL NPL ratio

(%)% of Total

NPL NPL ratio

(%)

Agriculture 39.4% 23.7% 12.4% 5.9%

Construction and real estate

1.0% 0.4% 2.9% 1.2%

Consumer credit 32.0% 11.5% 44.9% 15.5%

General commerce 7.0% 3.3% 10.0% 3.8%

Government 4.7% 3.3% 9.4% 5.1%

Manufacturing 0.6% 0.1% 0.7% 0.1%

Oil & Gas services 3.3% 3.2% 5.4% 9.3%

Oil & Gas downstream 0.1% 0.0% 0.2% 0.1%

Oil & Gas upstream 0.0% 0.0% 0.0% 0.0%

Transportation 12.0% 57.2% 14.1% 54.4%

Communication 0.01% 0.00% 0.00% 0.00%

Grand Total 100.0% 3.9% 100.0% 3.9%

H1 2019% of total

NPLsFY 2018

% of total NPLs

Local currency 14,004 75% 15,037 85%

Foreign currency 4,762 25% 2,677 15%

Total NPLs 18,766 100% 17,714 100%

Loan Performance


Balance sheet – Customer deposits

Customer deposits and CASA ratio Contribution to customer deposits by product

❖Customer deposits declinedby 14% to close atN693.5billion fromN807.7billion in FY 2018 dueto release of expensive termand call deposits.

❖Term and call depositsdeclined by 37% and 42%respectively while currentand savings account balancesgrew by 3% and 10%respectively.

❖The deposit mix improved asCASA ratio grew to 68.9% asat H1 2019 from 56.8% in FY2018.

H1 2019

LCY FCY Total

N’million N’million N’million

Personal & Business Banking 295.5 177.7 473.2

Current deposits 164.3 154.2 318.5

Savings deposits 73.8 - 73.8

Call deposits 5.0 0.5 5.5

Term deposits 52.4 23.01 75.4

Corporate & Investment Banking 154.0 66.3 220.3

Current deposits 54.7 31.1 85.8

Call deposits 24.0 13.3 37.3

Term deposits 75.4 21.9 97.3

Total 449.5 244.0 693.5

65% 35% 100%

FY 2018

LCY FCY TotalN ’billion N ‘billion N ‘billion

339.6 166.1 501.7

204.3 121.5 325.8

67.3 - 67.3

5.3 0.9 6.2

62.7 39.7 102.4

171.0 131.0 306.0

38.5 26.9 65.4

37.0 30.5 67.5

95.4 77.7 173.1

510.6 297.1 807.7

63% 37% 100%

Customer Deposits

693,548 807,692

13,094 (30,906) 6,435

(102,767)

Customerdeposits FY

2018

Currentaccounts

Call deposits Savingsaccounts

Termdeposits

Customerdeposits H1

2019

632.8 753.6 767.4 807.7 693.5

60.1%

49.2%54.9%

56.8%

68.9%

40%

50%

60%

70%

0

150

300

450

600

750

900

H1 2017 FY 2017 H1 2018 FY 2018 H1 2019

N ‘billionN ‘billion


Balance sheet – Shareholder value Return on average equity

Net assets value per share and price-to-book ratio Market capitalisation

1,595 1,812 2,073 2,299 2,703

2.1 2.3

2.5

2.1

1.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

0

500

1,000

1,500

2,000

2,500

3,000

H1 2017 FY 2017 H1 2018 FY 2018 H1 2019Net asset value per share Price- to- book

kobo Times

330.0 417.1 522.6 491.0 412.2 0

100

200

300

400

500

600

H1 2017 FY 2017 H1 2018 FY 2018 H1 2019

N ’billion

31.3% 28.9%

43.3%

34.5%28.5%

H1 2017 FY 2017 H1 2018 FY 2018 H1 2019

Capital and Shareholder Value

19.2% 19.6%

23.3%21.3%

23.6%22.9% 23.5%

27.4%24.7%

27.3%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

H1 2017 FY 2017 H1 2018 FY 2018 H1 2019

Tier 1 capital adequacy Total capital adequacy Statutory minimum


Business unit results

Personal & Business Banking

(“PBB”)


94.7

93.1

H1:18

H1:19

%

PBB Performance Highlights

Cost to Income Credit Loss RatioROE

+7%

0.4

1.6

FY 18

H1:19

%

+10%

Total Income

H1:19: N26.6bnH1:18: N24.1bn

8.5

0.5

H1:18

H1:19

%

-93%Profit After Tax

H1:19: N192mnH1:18: N2.7bn

+1%

Gross loans & AdvancesH1:19: N182.0bnFY18: N179.8bn

-6%

Customer DepositsH1:19: N473.3bnFY18: N501.7bn

NPL Ratio

9.0

9.9

FY 18

H1:19

%


PBB Financial Analysis – H1 2019

Performance highlights

H1 2019 Change H1 2018

Income statement N’million % N’million

Net interest income 17,726 10 16,123

Non-interest revenue 8,851 11 7,986

Total income 26,577 10 24,109

Credit impairment charges (1,440) (>100) 1,860

Operating expenses (24,731) 8 (22,824)

Profit before tax 406 (87) 3,145

Profit after tax 192 (93) 2,653

Balance sheet H1 2019 FY 2018

Gross loans & advances 182,047 1 179,813

Deposit liabilities 473,259 (6) 501,689

Key selected ratios H1 2019 H1 2018

Cost to income ratio % 93.1 94.7

CASA ratio % 83 76

H1 2019 FY 2018

Credit loss ratio % 1.6 0.4

❖ 7% decline in interest expense is a reflection of the business’continued effort to replace expensive term deposits with lowcost deposits which led to a CASA ratio of 83% as against FY2018 of 78%. This decline coupled with 6% YoY growth ininterest income led to a 10% growth in NII.

❖ Non-interest revenue grew as transaction turnover grewyear-on-year across our banking channels.

❖ In line with our discipline, provisions were made on somedelinquent loans which led to credit impairment charges ofN1.44bn as against a write back of N1.86bn in the priorperiod.

❖ While some savings were made on staff costs YoY, operatingexpenses grew by 8% YoY as a result of AMCON charges anddeposit insurance.

❖ Loan book grew slightly as we continue to support our clientbusiness while exploring opportunities to support the varioussectors of the economy most especially the real andagricultural sectors.

❖ Deposit book declined by 6% YTD due to our deliberateefforts to replace expensive deposits with cheaper deposits toreduce our cost of funds.


29,537,523

32,304,38831,857,214

36,081,792

Q3-18 Q4-18 Q1-19 Q2-19

Digital Transaction Trend Q-o-Q

1,719,454

1,797,994

1,641,711 1,633,975

Q3-18 Q4-18 Q1-19 Q2-19

Branch Transaction Trend Q-o-Q

39,620,364

54,241,614

67,939,006

HY 2017 HY2018 HY 2019

Digital Transaction Trend HY-o-HYWith the current volume of digital transactions as at H1 2019, we arewell on course to improve the performance by full year 2019 whilesetting another higher benchmark for volume of transactions, in linewith the trend in the past 3 years.

The bank continues to drive digital transactions as customers becomemore comfortable using our alternative channels. This is reflected inthe 13% growth in Digital transactions between Q1 & Q2 2019.

Digital Channels


Digital Channels

5,551,148

6,969,093

12,520,241

6,567,026

2,330,482

- 5,000,000 10,000,000 15,000,000

Q1 2019

Q2 2019

HY 2019

HY 2018

HY 2017

USSD Banking

4,909,889

5,693,968

10,603,857

6,523,376

2,475,218

Q1 2019

Q2 2019

HY 2019

HY 2018

HY 2017

Mobile Banking

3,456,193

4,075,705

7,531,898

4,950,028

2,874,929

Q1 2019

Q2 2019

HY 2019

HY 2018

HY 2017

POS

130,867

103,759

234,626

247,009

171,095

Q1 2019

Q2 2019

HY 2019

HY 2018

HY 2017

SME Internet Banking

12,428,975

13,674,846

26,103,821

23,776,621

21,278,667

Q1 2019

Q2 2019

HY 2019

HY 2018

HY 2017

ATM

36,576

46,472

83,048

65,507

43,051

Q1 2019

Q2 2019

HY 2019

HY 2018

HY 2017

Bulk Note Acceptors (BNA)


Digital Lending (EZ Cash)We have made progress with the Instant

Cash Advance and the number of loans

disbursed has increased. This would

continue to be a major focus for the second

half of 2019.

Trade OpportunitiesThe second half of the year presents a

lot of opportunities for Trade.

Cards We aim to increase monthly revenue on

cards in H2 2019.

Virtual BankingThe launch of the Virtual

Banking 2.0 is set for Q3 2019

and would enable us increase

scale and ramp up customer

acquisition.

Cards

Trade

Opportunities

Virtual Banking

Digital Lending

(EZ Cash)

Opportunities for 2nd Half 2019PBB– Moving forward 2019

We remain committed to our Africa China Banking proposition

Corporate & Investment Banking (CIB)


41.8

41.4

H1:18

H1:19

%

CIB Performance Highlights

Cost to Income Credit Loss RatioROE

+7%

-1.3

-1.3

FY18

H1:19

%

-5%

Total Income

H1:19 : N43.3bnH1:18 : N45.5bn

57.5

38.1

H1:18

H1:19

%

-15%

Profit After Tax

H1:19 : N24.0bnH1:18 : N28.3bn

+7%

Gross loans & AdvancesH1:19: N297.6bnFY18: N279.1bn

-28%

Customer DepositsH1:19 : N220.3bnFY18: N306.0bn

NPL Ratio

0.6

0.3

FY18

H1:19

%


CIB Financial Analysis – H1 2019


H1 2019 Change H1 2018

Income statement N ’million % N ’million

Net interest income 18,151 (15) 21,282

Non-interest revenue 25,148 4 24,218

Total income 43,299 (5) 45,500

Credit impairment charges 1,962 (46) 3,628

Operating expenses (17,905) (6) (19,012)

Profit before tax 27,356 (9) 30,116

Profit after tax 23,969 (15) 28,322

Balance sheet H1 2019 FY 2018

Gross loans & advances 297,626 7 279,133

Deposit liabilities 220,289 (28) 306,003

Key selected ratios H1 2019 H1 2018

CASA ratio % 39 20

❖We witnessed good performance from our capitalmarkets, advisory, FX trading and trade financebusinesses in the first half of the year, despite theeffect of electioneering on business activities.

❖ Credit impairment charges were a write back justlike the previous year but the recovered sum waslower.

❖ Cost-to-income ratio moderated down to 41.4%from 41.8% in H1 2018.

❖ Loan book growth was driven by opportunities inoverdrafts.

❖ Deposit book declined due to our drive to curtailcost of fund by releasing expensive term deposits.


Growing deposits with focus on transactional low cost deposits. Relentless focus on lowering cost of funding.

Growing quality loans and advances with focus on the more resilient sectors of the economy.

Focus on winning mandates in our capital markets businesses.

Growing our Trade Finance market share.

Growing market share in our foreign currency trading business.

CIB– Moving forward 2019

1

4

2

3

5

Develop structured products in the Global Markets space to target foreign Fixed Income sector clients.6

WealthWealth


28.5

30.6

H1:18

H1:19

%

Wealth Performance Highlights

Cost to IncomeROE

+7%flat

Total Income

H1:19: N24.3bn

H1:18: N24.4bn

77.8

54.4

H1:18

H1:19

%

flat

Profit After Tax

H1:19: N12.1bn

H1:18: N12.1bn

+8%

Assets under

Management

H1:19: N3.48trn

FY18: N3.22trn

+1%

No. of RSAs

H1:19: 1.708mn

FY18: 1.695mn


Wealth Financial Analysis – H1 2019


H1 2019 Change H1 2018

Income statement N ’million % N ’million

Net interest income 3,433 24 2,764

Non-interest revenue 20,853 (4) 21,624

Total income 24,286 - 24,388

Credit impairment charges 35 75 20

Operating expenses (7,433) 7 (6,939)

Profit before tax 16,888 (3) 17,469

Profit after tax 12,084 - 12,109

H1 2019 FY 2018

Assets under Management (N ’million) 3,478,845 8 3,221,574

Retirement Savings Accounts (number) 1,708,902 1 1,695,861

Key selected ratios H1 2019 H1 2018Cost to income ratio % 30.6 28.5

❖Net interest income grew by 24% as the business continuesto invest its capital in financial and investment securities.

❖Non-interest revenue declined by 4% due to the impact ofregulatory fee reduction.

❖Operating expenses grew by 7%, driven by increased pensionprotection levy and marketing expenses.

❖Cost-to-income ratio deteriorated year-on-year but thebusiness will continue to strive for better efficiencies.


Wealth – Moving forward 2019

Social, Economic and Environment (SEE) 1We will continue to make long term investments that willpreserve the environment and create sustainable impacton our society. We will also continue to engage investeecompanies on Environmental, Social and Governance(ESG) considerations.

Micro Pension 3

We will continue to create awareness ,and sensitizeprospective clients in the informal sector on theimportance of saving towards retirement. We will alsoalign all our onboarding channels with the EnhancedContributor Registration System (ECRS)..

Digitization4We will continue to focus on our digitization initiatives such asupgrading of core applications, comprehensive revamp of themutual fund on-boarding and top-up processes as well as rollout of the Invest Beta solution.

2 Collaboration

We will continue to leverage on the Stanbic IBTC’secosystem to create unique value proposition forclients.

Employee Engagement 5

We will focus on improving employee net promoter scoreas well as continue to build a digitally savvy talent pool.

Outlook & Guidance for 2019


Outlook for H2 2019

Banking Industry 2✓ Interest rates remain around 12% - 14% ✓ Stable foreign exchange rate✓ Heightened regulation in a bid to drive loan growth✓ Pressured NIMs✓ Relatively tight liquidity regime✓ Improved digital efficiency✓ Improvement in asset quality but risks still lingers

Stanbic IBTC3Areas of focus for 2019 financial year:✓ Cost efficiency✓ Improving risk asset quality✓ Loan growth✓ Growing low-cost deposits✓ Client service and improving customer experience✓ Digitization

Key risks to our results are:✓ Low-cost deposit growth✓ Competitive asset pricing✓ Regulatory interventions

Nigeria’s Economic & Political environment1✓ Moderate economic growth✓ Stable oil production levels and relative peace in the

Niger Delta Region✓ Stable oil price around the $60/bbl levels✓ Fairly contentious political environment✓ Average headline inflation of 11%✓ Accretion to external reserves


2019 Guidance Vs H1 2019 Actual

2018 Actual H1 2019 Actual 2019 Guidance

19%AuM Growth 8% 15% - 20%

34.5%Return on Equity 28.5% 25% - 30% *

52.9%Cost to Income 53.2% 50% - 55%

5.2%Net Interest Margin 4.9% 4.0% - 5.0% *

(0.7%)Cost of Risk (0.2%) <3.0%

57%CASA Ratio 68.9% 55% - 60%

3.9%NPL Ratio <5%

7%Deposit Growth (14%) (10%) – (15%) *

16%Loan Growth 5% 10% - 15%

* Revised

3.91%


Questions


Appendix


1989 2001 2005 2007 2012

Incorporated as Investment Banking & Trust Company Limited and commenced operations as a Merchant bank.

Obtained Universal Banking Licence in Nigeria.

Listed on The NSE on 25 April 2005.

Merged with Chartered Bank & Regent Bank and changed name to IBTC Chartered Bank PLC.

Merged with Stanbic Nigeria and Standard Bank gained control of the combined entity in a US$1bn transaction.

Holding Company Structure was adopted.

Stanbic IBTC Trustees Ltd

Stanbic IBTC Nominees Ltd

Stanbic IBTCVentures Ltd

Stanbic IBTC Bureau De Change Ltd

99.9%

Stanbic IBTCBank PLC

99.9%

Stanbic IBTC Holdings PLC

88.24%99.9%99.9% 99.9% 99.9%

99.9% 99.9%99.9%

Stanbic IBTC Pension Managers Ltd

Stanbic IBTC Investments Ltd

Stanbic IBTC Asset Management Ltd

Stanbic IBTC Capital Ltd

Stanbic IBTC Stockbrokers Ltd

About Stanbic IBTC Holdings PLC

Stanbic IBTC Insurance Brokers Limited

75%

2018

Standard Bank increased its stake in Stanbic IBTC to 65.35% in May 2018.

About Stanbic IBTC Holdings PLC


Group income statement

Group income statement

Change%

H1 2019Nmillion

H1 2018Nmillion

Gross earnings 3 117,374 114,207

Net interest income (2) 39,310 40,169 Interest income 1 60,784 59,924 Interest expense 9 (21,474) (19,755)

Non-interest revenue 2 54,852 53,828 Net fees and commission revenue (2) 35,969 36,687

Fees and commission revenue 2 37,707 37,142 Fees and commission expense >100 (1,738) (455)

Trading revenue 10 17,603 15,976 Other revenue 10 1,280 1,165

Total income 94,162 93,997 Credit impairment charges (90) 557 5,508

Income after credit impairment charges (5) 94,719 99,505 Operating expenses 3 (50,069) (48,775)Staff costs (7) (19,885) (21,333)Other operating expenses 10 (30,184) (27,442)

Profit before taxation (12) 44,650 50,730 Direct taxation 10 (8,405) (7,646)Profit for the period (16) 36,245 43,084


Group quarterly income statement

Group quarterly income statement

QoQ Group Group Group Change Q2 2019 Q1 2019 H1 2019

% N’million N’million N’million Gross income 58,681 58,693 117,374 Net interest income (5) 19,125 20,185 39,310

Interest income (5) 29,642 31,142 60,784 Interest expense (4) (10,517) (10,957) (21,474)

Non-interest revenue 3 27,848 27,004 54,852 Net fee and commission revenue 14 19,178 16,791 35,969

Fee and commission revenue 17 20,369 17,338 37,707 Fee and commission expense >100 (1,191) (547) (1,738)

Trading revenue (20) 7,805 9,798 17,603 Other revenue >100 865 415 1,280

Total income (0.5) 46,973 47,189 94,162 Credit impairment charges (>100) (834) 1,391 557 Income after credit impairment charges (5) 46,139 48,580 94,719 Operating expenses (0.3) (24,998) (25,071) (50,069)

Staff costs 17 (10,715) (9,170) (19,885)Other operating expenses (10) (14,283) (15,901) (30,184)

Profit before taxation (10) 21,141 23,509 44,650 Taxation 7 (4,046) (4,359) (8,405)Profit for the period (11) 17,095 19,150 36,245


Group statement of financial position

YTD Change%

H1 2019N ‘million

FY 2018N ‘million

Assets

Cash and cash equivalents (2) 445,491 455,773

Pledged assets 53 218,048 142,543

Trading assets (14) 72,446 84,351

Derivative assets (28) 21,832 30,286

Financial investments (33) 267,468 400,000

Loans and advances 7 470,898 441,261

Loans and advances to banks 85 15,823 8,548

Loans and advances to customers 5 455,075 432,713

Other assets 9 84,819 77,787

Investments in subsidiaries - -

Property and equipment 18 25,608 21,652

Intangible assets (1) 819 827

Right of Use Asset 3,130 -

Deferred tax assets (5) 8,719 9,181

Total assets (3) 1,619,278 1,663,661

Equity and liabilitiesEquity 10 264,404 239,667 Equity attributable to ordinary shareholders

10 259,669 235,406

Ordinary share capital - 5,120 5,120 Ordinary share premium - 76,030 76,030 Reserves 16 178,519 154,256 Non-controlling interest 10 4,735 4,261

Liabilities (5) 1,354,874 1,423,994 Trading liabilities 18 148,466 125,684 Derivative liabilities (38) 2,593 4,152 Current tax liabilities 15 17,141 14,899 Deposit and current accounts (15) 822,480 967,964

Deposits from banks (20) 128,932 160,272 Deposits from customers (14) 693,548 807,692

Other borrowings >100 142,587 69,918 Debt securities issued 0 60,615 60,595 Provisions (4) 12,931 13,452 Other liabilities (11) 148,061 167,193 Deferred tax liabilities - 137

Total equity and liabilities (3) 1,619,278 1,663,661

YTD Change%

H1 2019N ‘million

FY 2018N ‘million


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We do not accept liability for any loss (direct or consequential) arising from use of this presentation. You must not rely on any communication (written or oral) from us asinvestment advice, a recommendation to enter into a transaction (which includes the information and explanations related to the terms and conditions of a transaction) ordeem it to be an assurance or guarantee as to the expected results of a transaction. Investments discussed in this presentation may fluctuate in price or value over time andpast performance is not indicative of future results. While we have taken care in preparing this presentation, we give no representation, warranty or undertaking andaccept no responsibility or liability as to the accuracy or completeness of the information set out in this presentation. This presentation does not represent an offer offunding and any facility to be granted in terms of this presentation is subject to us obtaining the requisite internal and external approvals.

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Stanbic IBTC Holdings PLC - The Vault...H1 2015 H1 2016 H1 2017 H1 2018 H1 2019 22,135 22,849 41,035...

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