Stanbic IBTC Holdings PLC - The Vault...Financial results –FY 2017 8 3. Business unit results 24 4. Outlook for 2018 38 5. Appendix 41 Stanbic IBTC and its operating environment

Stanbic IBTC Presentation / page 1 /

Stanbic IBTC Holdings PLC

(“Stanbic IBTC”)

FY 2017 Results PresentationMarch 2018


Contents

Section Page

1. Stanbic IBTC and its operating environment 3

2. Financial results – FY 2017 8

3. Business unit results 24

4. Outlook for 2018 38

5. Appendix 41

Stanbic IBTC and its

operating environment Yinka Sanni

Chief Executive, Stanbic IBTC Holdings PLC


Stanbic IBTC is a financial institution in Nigeria that offers

end-to-end financial services through a three-pronged

structure: Corporate and Investment Banking, Personal

and Business Banking and Wealth Management.

Stanbic IBTC is 53.07% owned by Standard Bank Group

and draws on the deep resources within the Standard

Bank Group and emerged from the merger of Stanbic

Bank Nigeria Limited with IBTC Chartered Bank PLC in

2007.

During the year, our business divisions achieved strong

operating results and we retained our market leadership

across our various businesses such as global markets,

investment banking, pension, stockbroking, asset

management and custodial services with several

accolades received during the year. The Group remains

committed to delivering end-to-end financial solutions to

our esteemed customers.

Fitch retained our AAA national ratings which reaffirms

our strong fundamentals, stability, credit worthiness and

low relative risk in the Nigerian financial markets.

About Stanbic IBTC Holdings PLC

Key focus areas

Strategic Value Drivers

Universal Financial Service

Organization

(UFSO)

Digitization

Customer Centricity

We want to do

valuable things

for clients

Delivering a seamless

universal financial

services proposition

Via digital platforms

while exploring new

technologies


Strategic Objectives

Customer Service: deliver

exceptional service and delight our customers

Volumes/ Cost: achieve volumes

while managing costs

End-to-end selling: ensure we provide

end-to-end solutions to our customers.

Brand: establish a

differentiated and well

recognized brand in Nigeria

People: ensure our people are

accountable, passionate and

engaged

Operating Platform:ensure our processes and infrastructure are

scalable and customer-focused

To be the

leading end-to-

end financial

solutions

provider in

Nigeria through

innovative and

customer

focused

people.

Committed to

solutions that

drive your

progress.

Mission

Strategic Objectives

Vision


Moderately improving operating environment

Movement in external reserves

Headline inflation

Crude oil price movement (monthly average) The continuous rise in average oil

price ($64.22 as at December 2017)

and increased production volumes

as a result of peace in the Niger

Delta region have helped stabilize

our external Foreign Exchange

(“FX”) reserves (Dec. 2017:

$38.73bn), despite the Central Bank

stepping up its FX interventions prior

to the introduction of the Investors’ &

Exporters’ Foreign Exchange

(“IEFX”) window in April 2017.

Crude oil prices initially dropped

below USD48 pbl on the back of

oversupply concerns. However,

prices have risen steadily to above

USD60 pbl due to efforts taken by

both OPEC and non-OPEC

members to cap supply.

Headline inflation declined to

15.37% in December 2017

(December 2016: 18.55%) due to a

decrease in food inflation, making it

the eleventh consecutive month of

easing inflation in 2017. Average

inflation for the year closed at 16.5%

year-on-year (2016: 15.6%).

-

10.0

20.0

30.0

40.0

Reserves (US$ billions)

US$ billions

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0US$

18.55 18.7217.78 17.26 17.24

16.25 16.10 16.05 16.01 15.98 15.91 15.90 15.37

0

4

8

12

16

20

Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17

%

*December 2017 Inflation forecast: Standard Bank Research


Moderately improving operating environment

Exchange rate movement

Interest rate movement

The IEFX window remains the most

liquid segment of the FX market, with

around USD25.5bn traded as at

December 2017. Most market

participants, including those involved in

portfolio flows, payments for services,

dividend payments as well as demand

for the imports of finished goods

continue to transact in the window.

Rates ranged between N320 and N375

at this window.

The yield curve is bull-flattening at the

short end, with the 3-year bond yielding

14.1% compared with the 14.9% 1-year

T-bill yield, and we see no imminent

easing of the policy stance by the CBN.

In fact, we expect that the CBN will

continue to sterilize NGN via a

combination of Open Market

Operations (OMOs) as well as requiring

pre-funding for bids at the CBN’s retail

and wholesale SMIS window. The tight

monetary stance is not expected to

change until inflation subsides further.

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17

Average inter-bank call rate Tbills - 86 days Tbills - 184 days Tbills - 303 days Bond - 3 year

100

150

200

250

300

350

400

450

500

550

Ma

y-1

4

Jun

-14

Jul-

14

Au

g-1

4

Se

p-1

4

Oct-

14

Nov-1

4

De

c-1

4

Jan

-15

Fe

b-1

5

Ma

r-15

Ap

r-1

5

Ma

y-1

5

Jun

-15

Jul-

15

Aug-1

5

Sep-1

5

Oct-

15

No

v-1

5

De

c-1

5

Jan

-16

Fe

b-1

6

Ma

r-16

Ap

r-1

6

Ma

y-1

6

Jun

-16

Jul-

16

Au

g-1

6

Se

p-1

6

Oct-

16

Nov-1

6

De

c-1

6

Jan

-17

Fe

b-1

7

Ma

r-17

Ap

r-1

7

Ma

y-1

7

Jun

-17

Jul-

17

Aug-1

7

Se

p-1

7

Oct-

17

No

v-1

7

De

c-1

7

NG

N / U

SD

ra

te

CBN Parallel market NIFEX NAFEX I&E FX Window

Financial Result

FY 2017 Victor Yeboah-Manu

Chief Financial Officer, Stanbic IBTC Holdings PLC


Interest Income

grew by 41% to

N122.9bn

Other revenue grew

by 32% to N945mn

Trading revenue

grew by 90% to

N29.1bn

Fees and Commission

revenue up by 12% to

N59.4bn

Gross Earnings grew by

36% to N212.4bn

Credit Impairment

rose by 29% to

N25.6bn

Fees and Commission

expenses declined by

55% to N341mn

Operating expenses

grew by 25% to

N86.0bn

Interest expense

was up by 33% to

N39.3bn

Total Expenses grew by

27% to N151.3bn

Summary of FY 2017 performance

Profit Before

Tax grew by

64% to

N61.2bn


Grew by >100% to

N151.5bn

Grew by 25% to N316.6bn

Customer Loan

Financial

Investment

Trading Assets

Total Assets

Increased slightly by 5% to

N372bn

Up to N1.39trn

(FY 2016: N1.05trn)

25%

Shareholders’

Fund

Customer Deposit

Total Liabilities

Capital Adequacy

Ratio

Increased by 33% to N182.1bn.

Grew by 34% to N753.6bn

Up by 32% to N1,201bn

(FY 2016: N912.7bn)

Group 23.5% (FY 2016: 22.8%)

Bank: 20.5% (FY 2016: 21.0%)

Summary of FY 2017 performance


Net Interest Margin

5.9%

6.9%

Cost to Income

54.8%

49.8%

Credit Loss Ratio

5.0%

6.6%

RoAE

18.9%

28.9%

Liquidity Ratio (Bank)

59.1%

102.3%

Basic EPS

246k

460k

NPL Ratio (IFRS)

5.0%

7.9%

Return on Asset

2.5%

3.8%

Key ratios

• PAT increase was driven by significant

growth in both interest income and non-

interest revenue thereby causing a year-on-

year growth in RoAE.

• The 90% trading revenue growth was largely

impacted by increased FX availability via the

IEFX window and improved demand of fixed

income and money market asset which

subsequently led to trading asset growth.

• Credit impairment charges increased as we

continued our clean-up of the risk asset

portfolio.

• Cost-to-income ratio improved as we

continue to improve the efficiency of our

operations and the excellent growth

recorded in total income.

• Though the economy is out of recession and

business activities are improving gradually,

we remain cautious with our lending which

saw our customer loans (net) increased

slightly.

FY 2016FY 2017


Income

Statement

Balance sheet

Key ratios

Overview of income statement for FY 2017

Nmillion

122,911

39,324

89,182

25,577

86,026

61,166

12,785

48,381

0

20 000

40 000

60 000

80 000

100 000

120 000

140 000

160 000

180 000

200 000

Interest income Interest expense Non-interestrevenue

Credit impairmentcharges

Operatingexpenses

Profit beforetaxation

Taxes Profit aftertaxation


Balance sheet

Income statement - NII

Evolution of net interest income

Drivers of net interest income (%) Breakdown of interest income

Net interest income was up

by 44% as interest income

increased by 41% to N122.9

billion (2016: N87.5billion)

largely due to growth in

income from investment

securities despite a 33%

growth in interest expense.

Consequently, net interest

margin improved as a result

of increase in asset yields,

which was on the back of

higher yields on investment

securities that contributed to

the growth in interest

income.

Cost of funds increased on

account of growth in interest

expense resulting from

increase in customer

deposits.

37,013 46,658 47,716 57,859 83,587

4.9%5.5%

4.7%

5.9%6.9%

4.5%5.1%

3.6% 3.9%4.8%

0.0%

2.0%

4.0%

6.0%

8.0%

-

20,000

40,000

60,000

80,000

100,000

2013 2014 2015 2016 2017Net Interest income Net interest margin before impairment charges Net interest margin after impairment charges

Nmillion

64% 63% 72%63%

50%

31% 31%25% 36%

48%

5% 5% 3% 1% 2%

0%

20%

40%

60%

80%

100%

2013 2014 2015 2016 2017

Loans and advances Investment securities Placements

11.4 11.2 13.1 13.5

16.6

4.9 3.9

5.6 4.0 4.3

4.9 5.5 4.7 5.9

6.9

2013 2014 2015 2016 2017

Asset yield Cost of funds Net interest margin


Income statement - NIR

Evolution of non-interest revenue

Breakdown of non-interest revenue by type

Non-interest revenue grew by 31%

driven by a 90% increase in trading

income and 13% growth in net fees

and commission.

Growth in trading revenue was

driven by increased income from

foreign exchange and fixed income

transactions, both growing by over

78% and over 100% respectively

following the CBN’s continued

introduction of initiatives to increase

FX liquidity and customer activity.

Our capital market businesses also

witnessed improved business

patronage which contributed to the

growth in non-interest revenue.

48,219 57,987 56,788 68,194 89,182

57%55% 56%

54%52%

40%

45%

50%

55%

60%

-

20,000

40,000

60,000

80,000

100,000

2013 2014 2015 2016 2017Non-interest revenue % of total income

Nmillion

Fees & commisions

77%

Trading revenue

22%

Other revenue

1%

Fees & commisions

66%

Trading revenue

33%

Other revenue

1%

2017 2016


Income statement - credit impairment

Credit impairment charges trend

Movement in credit impairment charges

Credit impairment charges

increased by 29% to N25.6

billion from N19.8 billion in

2016 as a result of

additional provisioning for

bad & doubtful loans.

Credit loss ratio worsened

to 6.6% as additional credit

impairment charges were

raised in line with efforts to

accelerate the write-off of

delinquent facilities.

1,922 3,502 12,009 15,925 25,831 745

(285)

2,922 3,878

(254)

0.9 0.8

3.8

5.2

6.6

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

(5,000)

-

5,000

10,000

15,000

20,000

25,000

30,000

2013 2014 2015 2016 2017

Credit impairment charge on non-performing loans Credit impairment charge on performing loans

Credit loss ratio

Nmillion %

change 2017 2016

% Nmillion Nmillion

Specific credit impairment charges 72 28,235 16,394

Provision for performing loans >(100) (254) 3,878

Total impairment charges 38 27,981 20,272

Recoveries >100 (2,404) (469)

Credit impairment charges 29 25,577 19,803


Income statement – operating expenses

Operating expenses and cost-to-income ratio

Taxation and effective tax rate

Operating expenses increased by 25% year-

on-year.

Staff cost was up 20% due to inflation

adjustment to staff salaries. Average

headcount also increased to ensure

adequate manpower to drive our strategy.

Other operating expenses increased by 28%

mainly as a result of growth in provision for

potential exposures, information technology

expenses and sundry expenses.

Cost-to-income ratio improved to 49.8% from

54.8% recorded in prior year as we continue

to maintain a higher growth in total income

compared to cost growth.

Effective tax rate declined to 20.9% from

23.4% year-on-year although the tax

payable increased YoY as profit grew.

57,948 57,901 62,066 69,041 86,026

68.0%

55.3%

61.7%

54.8%

49.8%

40.0%

50.0%

60.0%

70.0%

-

20,000

40,000

60,000

80,000

100,000

2013 2014 2015 2016 2017Operating expenses (N'm) Cost-to -income ratio

Nmillion

3,844 9,068 4,760 8,689 12,785

15.6%

20.8%20.1%

23.4%

20.9%

10.0%

15.0%

20.0%

25.0%

30.0%

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

2013 2014 2015 2016 2017

Taxation Effective tax rate

Nmillion


Balance sheet - Total assets

Total assets mix Total assets and ROA trend

Breakdown of total assets

28%16%

25% 30% 30%

18%

22%17%

24% 23%

38%42% 38%

34%27%

16% 20% 20% 12%21%

0%

20%

40%

60%

80%

100%

2013 2014 2015 2016 2017

Others Loans & advances to customers Financial investments Cash & loans to banks

1,386,416

410,971

162,531 43,240

316,641

372,088 58,45722,488

0

400,000

800,000

1,200,000

1,600,000

Total Assets Cash & loans to bank Trading and derivativeassets

Pledged assets Financial investments Loans & advances tocustomers

Other assets Intangible assets,property & equipment

Nmillion

761 942 938 1,054 1,386

2.9%

3.7%

1.7%

2.5%

3.8%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

-

400

800

1,200

1,600

2013 2014 2015 2016 2017

Total assets Return on assets


Balance sheet – Loans and advances

Loans and advances trend

Contribution to loans and advances by product

Gross loans and advances by currency

Gross loans portfolio has

grown slightly by 7.6%

year-to-date due to

cautious lending

approach.

Installment sales, finance

leases and mortgage

loans declined as a result

of maturities in the year.

Increase in overdraft and

term loans was due to a

review of risk appetite

considering the current

economic situation.

303.3 413.4 379.4 375.3 403.9 -

150.0

300.0

450.0

2013 2014 2015 2016 2017

NbillionLCY loans FCY loans Total loans

Nmillion Nmillion Nmillion

Personal & Business Banking 123,367 25,957 149,324

Mortgage 7,426 -

7,426

Instalment sale & finance leases 11,398 768 12,167

Overdrafts 21,203 2,552 23,756

Term loans 83,340 22,636 105,975

Corporate & Investment

Banking 94,749 159,779 254,528

Term loans 66,366 159,779 226,145

Overdrafts 27,030 - 27,030

Instalment sale and finance lease 1,353 - 1,353

Total loans 218,116 185,736 403,852

Percentage (%) 54% 46% 100%

375,316

3,314 30,472

403,853

Gross loansand advances

- FY 2016

Mortgagelending

Installmentsales and

finance leases

Overdrafts Term loans Gross loansand advances

- FY 2017

(3,751)(1,498)


Balance sheet – Loans and advances

Breakdown of loans by sector

FY 2017 FY 2016

Agriculture6%

Construction and real estate

11%

Consumer credit13%

Finance & Insurance

<1%

General commerce

9%

Government6%

Manufacturing31%

Oil & gas downstream

8%

Oil & gas services

1%

Oil & gas Upstream

11%

Transportation & communication

4%Agriculture

8% Construction and real estate

10%

Consumer credit14%

Finance & Insurance

<1%

General commerce

10%

Government4%

Manufacturing27%

Oil & gas downstream

8%

Oil & gas services

2%Oil & gas Upstream

8%

Transportation & communication

9%


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)

The non-performing loans

increased to N31.7 billion

(2016: N18.7 billion) The

main driver of the increase

in NPL was the

classification of some

corporate clients in

construction & real estate,

oil & gas downstream and

transportation &

communication. We

believe the loans will be

resolved soon and our

NPL ratio will decline

accordingly.

Consequently, NPL ratio

is;

IFRS 7.9% (FY 2016:

5.0%).

Prudential guidelines

8.6% (FY 2016: 6.3%).

NPL coverage ratio is

66.0% (FY 2016: 60.2%)

13.4 18.0 27.0 18.7 31.7

4.4% 4.3%

7.1%

5.0%

7.9%

0.0%

2.0%

4.0%

6.0%

8.0%

-

5.0

10.0

15.0

20.0

25.0

30.0

35.0

2013 2014 2015 2016 2017

Non-performing loans NPL/ total loans

N billion

2017

% of total

NPLs 2016

% of total

NPLs

Local currency 22,256 70% 16,096 76%

Foreign currency 9,457 30% 2,579 24%

Total NPLs 31,713 100% 18,675 100%

2017 2016

Sector% of Total

NPL

NPL ratio

(%)

% of Total

NPL

NPL ratio

(%)

Agriculture 4.7% 6.0% 16.7% 10.6%

Construction and

real estate5.6% 4.2% 1.7% 0.8%

Consumer credit 20.7% 12.9% 23.1% 8.2%

General commerce 5.2% 4.5% 13.0% 6.4%

Government 0.5% 0.7% 0.6% 0.8%

Manufacturing 0.4% 0.1% 9.2% 1.7%

Oil & gas services 1.6% 10.4% 9.4% 21.9%

Oil downstream 21.7% 21.0% 1.9% 1.2%

Transportation &

communication39.6% 27.2% 24.2% 15.9%

Grand Total 100.0% 7.9% 100.0% 5.0%


Balance sheet – Customer deposits

Customer deposits and CASA ratio

Contribution to customer deposits by product

Customer deposits by currency

Customer deposits grew by

34% to close at N753.6

billion from N561.0 billion in

2016.

The drive to grow

transactional balances

resulted in a 15% growth in

current account balances,

while savings account

balances grew by 25% from

FY 2016.

Term deposits increased by

60% which is a major

component of our deposit

growth and it impacted our

deposit mix.

The deposit mix declined as

CASA ratio was down to

49% as at 2017 from 57% in

2016.

416.4 494.9 493.5 561.0 753.6

52%

49%

44%

57%

49%

40%

45%

50%

55%

60%

-

200.0

400.0

600.0

800.0

2013 2014 2015 2016 2017

Deposit liabilities CASA mix

Nbillion

753,642

560,969

40,917 33,177 9,814

108,765

CustomerdepositsFY2016

Currentaccounts

Call deposits Savingsaccounts

Termdeposits

CustomerdepositsFY2017

LCY

deposits

FCY

deposits

Total

deposits

Nmillion Nmillion Nmillion

Personal & Business

Banking 266,647 169,974 436,621

Current Accounts 125,729 119,429 245,159

Savings Accounts 48,444 - 48,444

Call Deposits 5,335 1,500 6,834

Fixed Deposits 87,139 49,045 136,184


Banking 227,397 89,624 317,021

Current accounts 40,954 36,328 77,281

Call deposits 64,852 3,794 68,646

Term deposits 121,591 49,503 171,094

Total deposits 494,043 259,598 753,642

Percentage (%) 66% 34% 100%


Balance sheet – Capital and liquidity

Risk weighted assets and capital adequacy ratio

Breakdown of balance sheet funding

2017

The group maintained

adequate capital with total

capital adequacy ratio at

23.5% (Bank: 20.5%)

which is above the

regulatory requirement of

10%.

The group’s balance sheet

was funded mainly by

deposits from customers

which accounted for 54%

of total assets.

The group’s liquidity ratio

closed at 115.4% (Bank:

102.3%) against a

regulatory minimum of

30%.

393 659 646 695 867

22.0%

17.1% 17.4% 18.6% 19.6%

24.5%

20.4% 21.3%22.8% 23.5%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

(100)

100

300

500

700

900

2013 2014 2015 2016 2017

Risk weighted assets Tier I capital ratio Total capital ratio Statutory minimum

Nbillion

Equity13%

Deposits from customers

53%Deposits from banks

5%

Trading liabilities

1%

Other liabilities

16%

Borrowings12%

Equity13%

Deposits from customers

54%Deposits from

banks4%

Trading liabilities

5%

Other liabilities16%

Borrowings7% 2016


Balance sheet – Shareholder value

Return on average equity

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

The increase in profitability

impacted positively on ROAE

resulting in an increase to

28.9% from 18.9% achieved in

FY 2016.

The price-to-book ratio

appreciated on account of

increased share price resulting

from the renewed investor

confidence in Stanbic IBTC.

Consequently, Stanbic IBTC’s

market capitalization grew

significantly during the period

due to the share price

appreciation

20.5%

29.6%

12.9%

18.9%

28.9%

0.0%

10.0%

20.0%

30.0%

2013 2014 2015 2016 2017

Return on Equity

979 1,160 1,237 1,371 1,812

2.3 2.3

1.3

1.1

2.3

0.0

0.5

1.0

1.5

2.0

2.5

0

400

800

1,200

1,600

2,000

2013 2014 2015 2016 2017

Net asset value per share Price- to- book

kobo Times

213.5 270.0 165.3 150.0 417.10

150

300

450

2013 2014 2015 2016 2017

Nbillion

Personal & Business

Banking (“PBB”) Babatunde Macaulay

Executive Director, Stanbic IBTC Bank


PBB Highlight

Net Interest Income

N31.2billion

Total Income

N13.0billionNon-Interest Revenue

N44.3billion

Profit Before Tax

(N14.9billion)

10%

Non-performing loans

N16.9billion

Gross loans & advances

N436.6billionDeposit liabilities

N149.3billion

Credit Impairment

N15.0billion

2%

24%

NPL Ratio

11.4% (FY 2016: 12.3%)

Cost to Income

9.9% (FY 2016: 6.0%)

Credit loss ratio

99.9% (FY 2016: 82.4%)

RoE

(69.4%) (FY 2016: (5.6%))

Flat

4%

>100%

9%

58%

Increased declined

Cost of FundCASA Ratio

2.9% as at Dec 2017 67% as at Dec 2017


Steady growth in customer deposits

CASA Trend

PBB Highlight

Growth in customer numbers

240,389 253,700 284,868 290,018

348,720 353,954 379,558 386,333

422,257

436,316

-

100,000

200,000

300,000

400,000

500,000

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

Q12017

Q22017

Q32017

Q42017

142,469 136,412 173,570 179,379 235,288 228,272 260,842 265,560 284,486 293,595

4.79%

4.01% 4.00%3.8%

3.50% 3.50%

3% 3% 3%2.8%

-

100,000

200,000

300,000

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017CASA COF

1,149,537 1,177,391 1,228,347 1,291,639

1,361,677 1,421,115

1,521,136 1,593,361

1,665,954 1,747,784

-

400,000

800,000

1,200,000

1,600,000

2,000,000

Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017


Mobile banking downloads

Growth in customer acquisition (New to Bank customers)

PBB Highlight

70,95692,014

128,942149,762

171,368192,509

213,757235,215

254,127272,029

287,629

312,613

Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17

86%

11%

1%

2%

Andriod iOS Windows Black Berry

Mobile banking downloads


PBB Financial analysis – FY 2017

Net Interest Income (NII): The growth in NII was driven by a 29% increase in low

cost deposits (y-o-y) which had a positive impact on funding. The NII was also

positively impacted by improved yield on interest in loans and advances.

Non-Interest Revenue (NIR): The NIR dropped by 10% y-o-y. However, if we adjust

for the one-off international card revenues earned last year, it is revealed that NIR has

actually increased by 12%, despite regulatory induced reduction in transactional fees

in 2017 which impacted revenue downwards between 20% and 30%.

Credit impairment charges grew by 58% as a result of deliberate decision to clean

up delinquent assets on the book. However, the analysis of 2017 for new loan

bookings and new clients shows very good asset quality, implying that the clean up

work done on asset quality is yielding fruits.

Operating expenses growth is as a result of inflation adjustment to salaries and

increased cost of running branches.

Loan book declined due to asset quality remediation, maturities and write offs. Given

the clean up on the asset book, the business is focused on loan book growth within

the acceptable risk criteria. The business is also focused on improving the quality of

loans booked, while also focusing on recoveries.

Total customer deposits closed at N436billion, which represents a year-on-year

increase of 24%. The growth is driven majorly by current and savings accounts

(CASA), which grew by 29% year-on-year. CASA ratio closed at 67% as at December

2017 (up from 64% in same period of prior year).

Performance highlights

FY 2017 Change % FY 2016

Income statement N’million N’million

Net interest income 31,243 4 29,964

Non-interest revenue 13,044 (10) 14,512

Credit impairment charges (14,970) 58 (9,504)

Operating expenses (44,234) 21 (36,656)

Profit / (Loss) before tax (14,917) >100 (1,684)

Profit / (Loss) after tax (16,525) >100 (1,613)

Balance sheet FY 2017 FY 2016

Total assets 227,531 0 227,149

Gross loans & advances 149,324 (2) 152,360

Deposit liabilities 436,621 24 353,189

Key ratios FY 2017 FY 2016

Cost-to-income (%) 99.9 82.4

Credit loss ratio (%) 9.9 6.0

Net Interest Margin (%) 13.7 12.6


Moving forward 2018

PBB Financial analysis

• Delivering the Client Franchise: The business is focused on harnessing the opportunities in each of the

existing commercial banking names, establish the approach to deepen each relationship and fully unlock the

value they represent.

• Building the Personal Bank: The business is focused on growing the number of savings account and

would also focus on the youth segment by delivering products and services for this client segment.

• Building the Virtual Bank: The virtual banking platform shall support several product offering in order to

meet the needs of our target customer segment.

• Africa-China Banking: Our Africa-China banking center has been set-up and is geared for launch. The

center is aimed at providing bespoke solutions and addressing the needs of business communities in both

Nigeria and China.


Banking (“CIB”) Andrew Mashanda

Executive Director, Stanbic IBTC Bank


Net Interest Income

N48.0billion

Total Income


N89.0billion

Profit Before Tax

N48.9billion

62%

Non-performing loans

N15.1billion

Gross loans & advances

N317billionDeposit liabilities

N255billion

Credit Impairment

N10.6billion

14%

53%

NPL Ratio

5.8% (FY 2016: Nil)

Cost to Income

4.4% (FY 2016: 4.7%)

Credit loss ratio

33.2% (FY 2016: 45.4%)

RoE

43.6% (FY 2016: 24.9%)

80%

98%

>100%

>100%

3%

declinedIncreased

CIB Highlight


CIB Financial analysis – FY 2017

Net interest income was up by 98% due to favorable

yields on investment securities.

The adoption of flexible exchange rate system impacted

positively on trading revenue as FX liquidity improved

coupled with increased interest in various financial

assets.

Credit impairment charge was up 3% year-on-year as

we continue to work on improving our asset quality.

Operating expenses grew by 31%. Management

continues to focus on a disciplined approach to cost, to

improve efficiency resulting in a decline in cost-to-

income ratio to 33.2% (2016: 45.4%).

Loan book increased by 14% year-to-date though we

still remain cautious in our lending approach.



Income statement Nmillion Nmillion


Non-interest revenue 41,051 62 25,308

Credit impairment charges (10,607) 3 (10,299)

Operating expenses (29,556) 31 (22,492)

Profit before tax 48,857 >100 16,719

Profit after tax 45,748 >100 14,923


Total assets 1,114,890 43 779,060

Gross loans & advances 254,528 14 222,956

Deposit liabilities 317,021 53 207,780


Cost-to-income (%) 33.2 45.4

Credit loss ratio (%) 4.4 4.7

Net Interest Margin (%) 5.1 3.4


Moving forward 2018

CIB Financial analysis

• Focus on clients in the Country’s GDP growth-focused and resilient sectors.

• Optimize and grow balance sheet productivity by increasing the quality of the asset book.

• Continue to protect the asset book and keep NPL ratio below 5%.

• Grow cheap and sticky deposit liabilities to reduce cost of fund.

• Grow the fees and commissions sources to drive the NIR line.

• Seek opportunities that will result from the changing macro-economic environment.

• Develop new products and services to meet clients’ needs.

Wealth

Eric Fajemisin

Chief Executive, Stanbic IBTC Pension Managers

Limited


Net Interest Income

N4.4billion

Total Income


N39.5billion

Profit Before Tax

N27.2billion

24%

No. of RSAs

1.6 million

N2.7 trillionAsset under Management

14%

31%

61.7% (FY 2016: 36.2%)

Cost to Income

31.0% (FY 2016: 30.9%)

RoE

23%

18%

23%

6%

declinedIncreased

Wealth Highlight


Wealth financial analysis – FY 2017

Net interest income grew by 18% on account of higher

yields on government and financial investments.

Non-interest revenue grew by 24% due to increased

revenue from management fees as assets under

management continue to grow.

Operating expenses grew by 24%, driven by

inflationary adjustment to staff salaries, while other

operating expenses increased by 18% on the back of

increased pension protection levy and marketing

expenses.

Cost-to-income ratio remained flat at 31.0% at the end

of the period from 30.9% recorded in FY 2016.

AuM continues to grow at double digits.



Income statement Nmillion Nmillion


Non-interest revenue 35,087 24 28,374

Operating expenses (12,236) (24) (9,893)

Profit before tax 27,226 23 22,174

Profit after tax 19,158 26 15,210


Total assets 43,995 (7) 47,317

Assets under management 2,713,800 31 2,076,423

Retirement savings accounts (Nos) 1,595,343 6 1,508,040


Cost to income ratio (%) 31.0 30.9


Moving forward 2018

Wealth financial analysis

• We will continue to follow up with employers for pension remittances as it is in the best interest of our clients and plan more

employer town hall sessions in 2018 to allow for more direct stakeholder engagement. We will also stay ready for regulatory

changes in the pension industry.

• The trustees’ business will consolidate on its mandate acquisition drive for lucrative transactions in its attempt to

significantly move the dial and earn appreciable income to ensure it meets and exceeds its financial targets.

• Improved visibility of our Wealth & Investment offering with deliberate collaboration with the group is also expected to

improve as we focus more on client centricity so our clients can extract the best value from our universal offering.

• We will continue in our drive to position the insurance brokerage business as the firm of choice and ensure a mutually

beneficial partnership with our key internal and external stakeholders.

Guidance for 2018Yinka Sanni

Chief Executive, Stanbic IBTC Holdings PLC


Outlook in 2018

With oil price on the rise, relative peace in the Niger Delta and increasing oil production coupled with the various tax

collection measures by the Federal Government of Nigeria, we are optimistic that the country’s economy will continue

on a growth trajectory. We are optimistic that we would sustain our 2017 positive performance in 2018.

On the other hand, we expect inflation rate to gradually decline and interest rates to moderate which should lead to a

fall in yields on government securities. We are of the view that headline inflation should moderate to around 13% at the

end of 2018.

We remain optimistic that our NPL ratio will moderate around our 2018 guidance ratio by the end of the financial year.

Areas of focus for 2018 financial year remain:

Cost efficiency

Improving risk asset quality

Growing low-cost deposits

New product development

Client service

Key risks to our results are:

High cost of risk

Low credit growth

Rising cost of funds

Declining yield on government securities


Income

Statement

Balance

sheet

Key

ratios

2018 Guidance Vs 2017 Performance

2018 GuidanceFY 2017

Actual

Loan Growth 7.5% - 10% 5%

Deposit Growth 20% - 25% 34%

Non Performing Loan ≤5% 7.9%

CASA Ratio 60% 49%

Cost of Risk <5% 6.6%

Net Interest Margin >6% 6.9%

Cost to Income 50% - 55% 49.8%

Return on equity 25% - 30% 28.9%

AuM Growth (Wealth) 20% - 25% 31%


Questions & Answers


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

Nigeria Ltd

Stanbic IBTC

Ventures Ltd

Stanbic IBTC

Bureau De Change Ltd

99.9%

Stanbic IBTC

Bank

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%


Group income statement

Change

%

2017

N million

2016

N millionGross earnings 36 212,434 156,425

Net interest income 44 83,587 57,859

Interest income 41 122,911 87,467

Interest expense 33 (39,324) (29,608)

Non-interest revenue 31 89,182 68,194

Net fees and commission revenue 13 59,089 52,154

Fees and commission revenue 12 59,430 52,918

Fees and commission expense (55) (341) (764)

Trading revenue 90 29,148 15,326

Other revenue 32 945 714

Total income 37 172,769 126,053Credit impairment charges 29 (25,577) (19,803)

Income after credit impairment charges 39 147,192 106,250 Operating expenses 25 (86,026) (69,041)

Staff costs 20 (36,282) (30,173)Other operating expenses 28 (49,744) (38,868)

Profit before taxation 64 61,166 37,209 Direct taxation 47 (12,785) (8,689)

Profit for the period 70 48,381 28,520


Group quarterly income statement

Q4 2017 Q3 2017 Q2 2017 Q1 2017

N ’million N ’million N’million N’million

Gross income 58,214 57,022 50,176 47,022

Net interest income 20,640 21,912 22,155 18,880

Interest income 33,227 32,956 29,887 26,841

Interest expense (12,587) (11,044) (7,732) (7,961)

Non-interest revenue 24,902 23,991 20,183 20,106

Net fee and commission revenue 15,780 15,416 14,699 13,194

Fee and commission revenue 15,865 15,491 14,805 13,269

Fee and commission expense (85) (75) (106) (75)

Trading revenue 8,953 8,229 5,315 6,651

Other revenue 169 346 169 261

Total income 45,542 45,903 42,338 38,986

Credit impairment charges (5,243) (6,381) (10,626) (3,327)

Income after credit impairment charges 40,299 39,522 31,712 35,659

Operating expenses (24,783) (23,041) (21,169) (17,033)

Staff costs (8,642) (11,148) (9,258) (7,234)

Other operating expenses (16,141) (11,893) (11,911) (9,799)

Profit before taxation 15,516 16,481 10,543 18,626

Taxation (4,807) (2,921) (2,505) (2,552)

Profit for the period 10,709 13,560 8,038 16,074


Group statement of financial position

Change

%

2017

Nmillion

2016

Nmillion

Assets

Cash and cash equivalents 33 401,348 301,351

Pledged assets 53 43,240 28,303

Trading assets >100 151,479 16,855

Derivative assets (23) 11,052 14,317

Financial investments 25 316,641 252,823

Assets held for sale 2 114 112

Loans and advances 4 381,711 368,229

Loans and advances to banks (37) 9,623 15,264

Loans and advances to

customers5 372,088 352,965

Other assets 26 49,442 39,220

Property and equipment (5) 21,883 22,962

Intangible assets (15) 605 713

Deferred tax assets 3 8,901 8,638

Total assets 32 1,386,416 1,053,523

Change

%

2017

Nmillion

2016

Nmillion

Equity and liabilities

Equity 32 185,218 140,798

Equity attributable to ordinary

shareholders33 182,060 137,102

Ordinary share capital 0 5,025 5,000

Ordinary share premium 2 66,945 65,450

Reserves 65 110,090 66,652

Non-controlling interest (15) 3,158 3,696

Liabilities

32 1,201,198 912,725

Trading liabilities >100 62,449 5,325

Derivative liabilities (78) 2,592 11,788

Deposit and current accounts 33 815,363 614,735

Deposits from banks 15 61,721 53,766

Deposits from customers 34 753,642 560,969

Other borrowings (22) 74,892 96,037

Subordinated debt 4 29,046 27,964

Current tax liabilities 29 12,240 9,508

Deferred tax liabilities >100 120 47

Provisions 23 12,979 10,581

Other liabilities 40 191,517 136,740

Total equity and liabilities 32 1,386,416 1,053,523



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Documents

Stanbic IBTC Holdings PLC - The Vault...Financial results –FY 2017 8 3. Business unit results 24 4. Outlook for 2018 38 5. Appendix 41 Stanbic IBTC and its operating environment