For the six months ended 30 June 2017 Analysis of ...

For the six months ended 30 June 2017

Analysis of financial resultsYour progress is woven into the fabric of Nigeria

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Analysis of financial results for the six months ended 30 June 2017

Overview of group income

Net interest income and margin analysis

Non-interest revenue

Credit impairment charges

Operating expenses

Taxation

Overview of group consolidated assets

Loans and advances

Loans and advances performance

Deposits and current accounts

Funding and liquidity

Market capitalisation and price-to-book ratioDividend payment historyEquity and range analysis

Financial and other definitions

Contact details

Segmental structure for key business units

Segmental income statement

Personal & Business Banking

Corporate & Investment Banking

Wealth

6970

Return on ordinary equity

Risk weighted assets

Group results in brief 2

Business unit review

41Income statement analysis

Balance sheet analysis

67Capital management

Market & shareholder information

74Other information

26

52

71

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Performance highlights

Financial results, ratios and statistics

Economic and capital market statistics

Half year performance

Summarised income statement – Group

Statement of comprehensive income – Group

Summarized income statement quarterly analysis – Group

Summarised income statement – Bank

Statement of comprehensive income – Bank

Summarized income statement quarterly analysis – Bank

Statement of financial position – Group

Group financial position quarterly analysis

Statement of financial position – Bank

Statement of changes in equity – Group

Statement of changes in equity – Bank

Statement of cashflows – Group

Statement of cashflows – Bank

Performance higlights

Gross earnings

N97.2 billion36% up

Profit after tax

N24.1 billion113% up

Cost-to-income ratio

47.0% (H1 2016: 57.7%)

Fitch rating

AAA(nga) (2016: AAA(nga))

Liquidity ratio (Bank)

90.4% (statutory minimum: 30%)

Total income

N81.3 billion43% up

Net loans & advances

N368 billion(FY 2016: N353 billion) up 4%

Capital adequacy ratio (Bank)

20.2% (H1 2016: 18.9%)

Annualized Return on average equity

31.3% (H1 2016: 15.0%)

NPL/total loan ratio

7.8% (FY 2016: 5.0%)

Profit before tax

N29.2 billion86% up

Deposit liabilities

N632.8 billion(FY 2016: N561 billion) up 13%

Credit loss ratio

7.3% (H1 2016: 4.3%)

Price to book

2.1 times (2016: 1.1 times)

Total assets

N1.274 trillion (FY 2016: N1,053 trillion) up 21%

Interest based revene

Non-interest based revene

Gross loans and advances

Deposits from customers

Interest based and non-interest based revenueCAGR (2013-2017): Interest based: 17%

Non-interest based: 14%

Gross loans and customer depositsCAGR (2013-2017): Gross loans: (2)%

Customer deposits: 1%10

0H1 2013 H1 2014 H1 2015 H1 2016 H1 2017

10,000

20,000

30,000

40,000

50,000

60,000

Nmillion

40,470

24,127

56,728

32,316

36,713

26,577

41,718

30,382 27,718

33,997

10

0H1 2015 FY 2015 H1 2016 FY 2016 H1 2017

10

200

300

400

500

700

600

Nbillion

632.8601.7

393.7

561.0

375.3

593.6

407.1431.5

493.5

379.4

2 3Group results

in brief

Business

unit review

Balance sheet

analysis

Market & shareholder

information

Income statement

analysis

Capital

management

Other

information

Stanbic IBTC Analysis of financial results for the 6 months ended 30 June 2017

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Title (continued)

Group results

in brief

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Performance highlightsFinancial results, ratios and statisticsEconomic and capital market statisticsHalf year performanceSummarised income statement – Group Statement of comprehensive income – GroupSummarized income statement quarterly analysis – Group Summarised income statement – Bank Statement of comprehensive income – BankSummarized income statement quarterly analysis – Bank Statement of financial position – GroupGroup financial position quarterly analysisStatement of financial position – BankStatement of changes in equity – GroupStatement of changes in equity – Bank Statement of cashflows – GroupStatement of cashflows – Bank

Group results in brief

Stanbic IBTC Group Change % H1 2017 H1 2016 FY 2016

Business unit contribution to profit before tax

Profit before tax Nmillion 86 29,169 15,682 37,209

Banking business >100 14,324 5,500 14,907

Personal & Business Banking Nmillion (>100) (5,179) 1,371 (1,684)

Corporate & Transactional Banking Nmillion >100 19,503 4,129 16,591

Investment Banking and other subsidiaries Nmillion >100 1,664 (233) 128

Wealth Nmillion 27 13,181 10,415 22,174

Balance sheet

Total assets Nmillion 21 1,273,960 1,174,543 1,053,523

Loans and advances (net of credit impairments) Nmillion 4 367,956 375,636 352,965

Deposits liabilities Nmillion 13 632,751 593,643 560,969

Key performance indicators

Net interest margin % 7.2 4.4 5.9

Non-interest revenue to total income % 49.5 60.0 54.1

Cost-to-income ratio % 47.0 57.7 54.8

Return on average equity % 31.3 15.0 18.9

Return on average assets % 4.3 2.2 2.5

Basic earnings per share kobo >100 230 95 246

Net asset value per share kobo 22 1,595 1,307 1,371

Shareholders' equity Nmillion 159,496 130,669 137,102

Other indicators

Price-to-book (P/B ratio) times 89 2.1 1.2 1.1

Effective tax rate % 17.3 27.8 23.4

Banking activities Change % H1 2017 H1 2016 FY 2016

Balance sheet

Total assets Nmillion 24 1,229,804 1,127,875 993,757

Loans and advances (net of credit impairments) Nmillion 4 367,956 375,636 352,965

Deposits from customers Nmillion 14 647,108 601,198 568,673

Selected returns and ratios

Return on average equity % 23.7 10.8 14.7

Return on average assets % 2.5 1.0 1.6

Loan to deposit ratio % 62.2 68.6 61.7

Net interest margin % 6.8 4.3 5.7

Non-performing loan to total loan % 7.8 6.9 5.0


Credit impairment charges Nmillion >100 13,953 8,450 19,803

Credit loss ratio % 7.3 4.3 5.2

Cost-to-income ratio % 53.3 66.3 61.9

Tier 1 capital adequacy % 16.1 14.2 16.3

Total capital adequacy % 20.2 18.9 21.0

Effective taxation rate % 4.7 6.3 (0.8)

4 5Group results

in brief

Business

unit review

Balance sheet

analysis


information

Income statement

analysis

Capital

management

Other

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Financial results, ratios and statistics

Stanbic share price NSE all share index Banking index

Economic and capital market statistics

Change % H1 2017 H1 2016 FY 2016

Economic indicators

Headline inflation % 16.1 16.5 15.7

GDP growth % (0.5) (2.1) (1.3)

External reserves $billion 15 30.3 26.4 25.8

Average official exchange rate N/$ 44 305.0 212.5 264.2

Market Indicators

NSE All Share Index 12 33,117.5 29,597.8 26,874.6

NSE turnover Nbillion 29 375 291.7 549.7

Average daily activity million 6 348.3 329.5 291.2

Aggregate market capitalisation Ntrillion 10 19 17.3 16.2

Equity market capitalisation Ntrillion 13 11.5 10.2 9.2

Stanbic share statistics

Share price

High for the period kobo 86 3,300 1,776 1,776

Low for the period kobo 23 1,500 1,223 1,223

Closing kobo >100 3,300 1,620 1,500

Shares traded

Number of shares thousands 61 300,355 185,988 348,093

Value of shares Nmillion >100 6,480 2,769 5,203

Market capitalisation Nbillon >100 330 162 150

6 7Group results

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Balance sheet

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Income statement

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Other

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Financial results, ratios and statistics (continued)

In H1 2017, the group experienced:

Globally

• The global economy continued to be characterised by substantial

appetite for risk assets as a result of ample global flows, despite

an increase in political risk globally;

• Global markets remained on edge with respect to substantial increase

in political risk events which included scheduled elections in the

Netherland and France as well as an unscheduled election in the

United Kingdom, coupled with still uncertain policy outlook from

the United States;

• After initially rallying towards USD55 per barrel, oil prices declined

substantially towards the end of H1:2017 as fundamentals remain

unfavorable with global production potentially rising due to

rising output from Nigeria and Libya. The freezes engineered by

OPEC did little to stem the decline in oil prices;

• Going by growth data in H1:2017, an uptick in Africa’s economic

growth seems well underway. This will likely prompt forecasters

like the IMF to upgrade their growth forecasts for 2017 and 2018.

The laggards are likely to be those commodity exporters that are

not allowing their economies to adjust to a low commodity price

environment;

Nigeria

• Anecdotal evidence in H1:2017 suggests that some macroeconomic

rebalancing is underway in the Nigerian economy and should continue

over the next year. A combination of contracting credit demand and

stunted investment spending will allow economic growth recover

slowly in the near term.

• The introduction of the Investors’ and Exporters’ Foreign Exchange

(IEFX) window has signaled yet another step taken by the Central

Bank of Nigeria (CBN) to improve the functioning of the FX market.

• Although the Central Bank left the formal policy rate unchanged

through the course of the first half of the year, it has engineered

tight NGN liquidity conditions which resulted in private sector

credit contracting by an average of 2.0% y/y between January

and April, after taking account of the revaluation of FX loans due

to the depreciation of the NGN.

• The depressed oil price and production meant that government

revenue remained under pressure. As a result, government had to

ramp up its borrowing both domestically and externally with the

issuance of USD1.5billion Eurobond and a USD300million Diaspora

bond.

• The capital market performance returned into positive territory

in H1 2017 as a result of improved economic conditions.

Share price performance: H1 2017 (rebased)

Stanbic’s share price outperformed both the Banking Index (BI) and The NSE ASI. Stanbic’s share price closed at N33.00 representing a 120% increase

from N15.00 at the end of 2016 while the BI and NSE ASI appreciated by 45.1% and 23.2% respectively.

0

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8 9Group results

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Half year performance

Operating environmentWith the improved economic activities as a

result of increased foreign exchange liquidity

and rising oil price, we expect the nation to

be on its way out of recession by the end of

this year. The Stanbic IBTC Bank Purchasing

Manager Index and declining inflation rate

are signals to Nigeria’s economic recovery.

Real GDP growth is forecasted to reach 1.0%

year-on-year in 2017 and 2.5% year-on-year

in 2018 according to Standard Bank Research

from a 1.5% contraction in 2016. It is expected

that with oil prices and production levels rising,

banks’ dollar liquidity pressures would gradually

ease. As such, the Nigerian economy contracted

by 0.52% in real terms in the first quarter of

2017, the lowest level of contraction recorded

in the last five quarters reflecting the gradual

recovery of the macro-economic environment.

The nation’s external reserves reached

$30.3 billion in June 2017, increasing by 17.4%

from $25.8 billion recorded in December

2016. The increase in crude oil output and

price accounted for the accretion in external

reserves. According to OPEC, Nigerian crude

production rose to 1.68 million b/d in June,

the highest level in more than one year. This

followed the restart of Forcados loadings for

the first time since October 2016.

Headline inflation which had been on the

rise through out 2016 has begun to inch lower

with five consecutive month decreases to June

2017. From 18.6 per cent in December 2016,

headline inflation rose to 18.7 per cent in

January 2017, but subsided to 17.8 per cent in

February, 17.3 per cent in March, 17.2 per cent

in April, 16.3 per cent in May and decelerated

further, reaching 16.1 per cent in June 2017

thus representing the stabilization of general

prices, although food inflation continues to rise.

Food inflation reached the 19 per cent handle

in June, representing a historical high.

The Nigerian Stock Exchange All Share Index

(“The NSE ASI”) closed in positive territory

at 33,117.5 at the end of June 2017, crossing

the 30,000.0 points mark for the first time in

about a year. The positivity witnessed in the


Non-interest revenue, which comprises revenue

from commissions, fees, trading and other

non-interest bearing revenue, was up by 18% to

N40.3 billion (H1 2016: N34.2 billion).

Net fees and commissions revenue

remained flat to N27.9 billion from previous

year, though we continue to face transaction

fee reduction from various stakeholders.

With the introduction of the IEFX market

and improved foreign exchange liquidity, we

expect investment banking deal pipelines will

be converted and growth in the stock market is

expected to impact revenue of our custody and

stockbroking businesses positively.

Trading revenue increased by 81% to N12

billion (H1 2016: N6.6 billion) on the back of

improved foreign exchange liquidity and high

interest rate on government securities.

Credit impairments

Credit impairment charges increased by 65%

to N13.95 billion (H1 2016: N8.5billion) as

we continued our clean-up of the risk asset

portfolio. With Nigeria falling into recession,

economic activites were impacted significantly

and we witnessed business activities decline. In

line with economic realities, the group had to

increase provisioning on its loan portfolio. The

increase in credit impairment charges led to a

higher cost of risk which increased to 7.3% from

5.2% in FY 2016.

Operating expenses

The group maintained cost discipline with cost

to income ratio declining to 47.0% from 57.7%

in H1 2016 as we continue on cost efficiency

drive. Operating expenses increased by 16% to

N38.2 billion (H1 2016: N32.9 billion). Staff

costs grew by 15% on the back of inflation

adjustment to staff salaries and net movement

in headcount of staff.

Other operating expenses increased by 17%

driven by increase in information technology,

AMCON sinking fund contribution expenses,

premises maintenance related expenses and

deposit insurance.

first half of the year may be attributed to major

interventions in the foreign exchange market

by the Central Bank which has boosted investor

confidence. The major intervention being the

introduction of the Investors’ and Exporters’

Foreign Exchange (“IEFX”) window which led to

significant improvement in the capital market

performance thereby impacting Assets Under

Management (“AUM”) positively.

The Federal Government introduced a

number of reforms aimed at revamping the

economy, one of which includes the publishing

of Economic Recovery and Growth Plan

(“ERGP”), a Medium Term Plan for 2017 –

2020 which was developed for the purpose of

restoring economic growth while leveraging

the ingenuity and resilience of the Nigerian

people. Furthermore, the signing of executive

orders aimed at improving the ease of doing

business in the country is a positive sign. That

said, implementation of reforms outlined in the

ERGP is key to ensuring sustainable growth and

development.

The financial sector has experienced

some regulatory changes since December

2016. The most significant has to do with the

foreign exchange market framework which the

introduction of the IEFX window has improved

dollar liquidity as we witnessed increased inflow

of funds from both foreign portfolio and direct

investors. While the monetary policy rate has

remained unchanged at 14.0%, the central bank

continues to implement a tight monetary policy

environment in order to curb inflation, limit

pressure on the exchange rate and engineer

positive real returns that will be attractive to

investors.

Available data from the CBN as at April 2017

suggests that average Capital Adequacy Ratio

(CAR) of Deposit Money Banks deteriorated to

12.8 per cent from 13.6 per cent in February,

which is below the prudential requirement

of 15.0 per cent for banks with international

authorization. Furthermore, Non-Performing

Loans (NPLs) rose to 15.2 per cent from 13.6

per cent in February 2017, which is above the

prudential guide of 5.0 per cent. The industry

Overall, the group’s profit before tax

increased by 86% to N29.2 billion (H1 2016:

N15.7 billion), while profit after tax also

increased by 113% to N24.1 billion (H1 2016:

N11.3 billion), attributable to increased interest

income and trading revenue.

Balance sheet analysisThe group’s total assets close at N1.27 trillion

at the end of June 2017, growing by 21% over

the N1.05 trillion recorded in FY 2016. The

growth in total assets is majorly from the 13%

growth in deposit from customers which funded

50% of total assets. Our eco-system and work

place banking team have been mining the

available opportunities as much as possible.

Loans and advances

Net loans and advances grew by 4% to N368

billion in the first six months of 2017 (FY 2016:

N353 billion), on the back of our growing

customer relationships. We will continue to

grow our loan book responsibly in line with

economic realities.

Non-performing loans increased by 65% to

N30.9 billion in H1 2017 from N18.7 billion in

FY 2016. The increase is largely on the back of

some newly classified loans in oil & gas sector.

The non-performing loans to total loans ratio

consequently deteriorated to 7.8% from 5.0%

recorded in FY 2016.


Customer deposits closed at N632.8 billion

in H1 2017 increasing by 13% from N561

billion recorded in FY 2016. The increase in

deposit from customers is supported by our

growing customer base, enlarged delivery

channels, digitalization, ecosystem and work

place banking strategy. Customer acquisition

initiatives continued to yield positive results

as current and savings account balances grew

by 19% from FY 2016.

The ratio of current and savings deposits

to total deposits increased from 57% to 60%

at the end of H1 2017.

The group maintained a liquidity position

above minimum requirement throughout the

period ended 30 June 2017. The liquidity ratio

closed at 100.2% (Bank: 90.4%) in H1 2017

higher than the regulatory minimum of 30%.

liquidity ratio also recorded a decline from 46.6

per cent to 44.6 per cent.

We cautiously anticipate some improvement

in asset quality in the latter part of the year as

the economy gradually recovers from recession.

The manufacturing and agricultural sectors

are expected to drive lending in the near term

driven by government’s resolve to increase

domestic production and reduce dependence

on imports. In addition, it is expected that

AUM will continue to rise as higher oil revenues

should result in state and local governments

making good on salary payments to government

workers and the capital markets continue to

outperform.

Our resultsOur performance in the first half of 2017 was

characterised by steady growth in balance

sheet with conscious effort of deposit liability

growth via current and savings account thereby

reducing our interest expense in line with our

strong focus on cost containment to mitigate

the impact of rising cost of funds and credit

impairments on our operating performance.

Income statement analysisThe group’s gross revenue grew by 36% to

N97.2 billion (H1 2016: N71.3 billion) on the

back of a 80% increase in net interest income.

Net interest income

Interest income grew by 55% to N56.7 billion

in H1 2017 from N36.7 billion achieved in H1

2016. This growth is supported by increase

in yields from investment securities. Interest

expense was up 13% much lower than the

income growth rate largely due to growth in less

expensive to total deposit ratio. This resulted

in an 80% increase in net interest income and

consequently a growth in net interest margin to

7.2% (FY 2016: 5.9%).

The central bank’s strategies to mop up

liquidity has continued to keep interest rate and

yield up amidst declining inflation. We expect

interest and inflation rate to converge at some

point.

Summarised income statement – Group

Change

%

H1 2017

Nmillion

H1 2016

Nmillion

FY 2016

Nmillion

Gross earnings 36 97,198 71,320 156,425

Net interest income 80 41,035 22,849 57,859

Interest income 55 56,728 36,713 87,467

Interest expense (13) (15,693) (13,864) (29,608)

Non-interest revenue 18 40,289 34,218 68,194

Net fees and commission revenue 2 27,893 27,406 52,154

Fees and commission revenue 1 28,074 27,795 52,918

Fees and commission expense 53 (181) (389) (764)

Trading revenue 81 11,966 6,607 15,326

Other revenue >100 430 205 714

Total income 43 81,324 57,067 126,053

Credit impairment charges (65) (13,953) (8,450) (19,803)

Income after credit impairment charges 39 67,371 48,617 106,250

Operating expenses (16) (38,202) (32,935) (69,041)

Staff costs (15) (16,492) (14,378) (30,173)

Other operating expenses (17) (21,710) (18,557) (38,868)

Profit before taxation 86 29,169 15,682 37,209

Direct taxation (16) (5,057) (4,365) (8,689)

Profit for the period >100 24,112 11,317 28,520

Profit attributable to:

Non-controlling interests (42) 1,067 1,853 3,878

Equity holders of the parent >100 23,045 9,464 24,642


Group H1 2017

Nmillion

Bank H1 2017

Nmillion

Group FY 2016

Nmillion

Bank FY 2016

Nmillion

Tier I capital 150,421 112,533 129,480 99,144

Tier II capital 28,827 28,070 28,906 28,099

Total qualifying capital 179,248 140,603 158,386 127,243

Credit risk 561,681 534,642 486,430 458,266

Operational risk 207,092 146,986 207,092 146,986

Market risk 15,425 15,425 1,917 1,917

Risk weighted assets 784,198 697,053 695,439 607,169

Capital adequacy

Tier I 19.2% 16.1% 18.6% 16.3%

Tier II 3.7% 4.0% 4.2% 4.6%

Total 22.9% 20.2% 22.8% 21.0%

Capital adequacyThe group’s capital base remained adequate with ratios above the regulatory requirement.

The group currently has no immediate plan to raise additional capital.

10 11Group results

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Half year performance (continued)

Summarised group income statement quarterly analysisStatement of other comprehensive income – Group

QoQ

Change

%

Q2 2017

Nmillion

Q1 2017

Nmillion

H1 2017

Nmillion

Gross income 7 50,176 47,022 97,198


Interest income 11 29,887 26,841 56,728

Interest expense 3 (7,732) (7,961) (15,693)

Non-interest revenue 0.38 20,183 20,106 40,289

Net fee and commission revenue 11 14,699 13,194 27,893

Fee and commission revenue 12 14,805 13,269 28,074

Fee and commission expense (41) (106) (75) (181)

Trading revenue (20) 5,315 6,651 11,966

Other revenue (35) 169 261 430

Total income 9 42,338 38,986 81,324

Credit impairment charges (>100) (10,626) (3,327) (13,953)

Income after credit impairment charges (11) 31,712 35,659 67,371

Operating expenses 24 (21,169) (17,033) (38,202)

Staff costs (28) (9,258) (7,234) (16,492)


Profit before taxation (43) 10,543 18,626 29,169

Taxation 2 (2,505) (2,552) (5,057)

Profit for the period (50) 8,038 16,074 24,112


Non-controlling interests (5) 520 547 1,067

Equity holders of the parent (52) 7,518 15,527 23,045

Profit for the period 8,038 16,074 24,112

Key performance indicator

Net interest margin (annualised) 7.8 7.0 7.2

Non-interest revenue to total income 47.7 51.6 49.5

Credit loss ratio (annualised) 11.1 3.6 7.3

Cost-to-income ratio 50.0 43.7 47.0

Return on average equity (annualised) 20.3 42.9 31.3

Return on average assets (annualised) 2.8 5.9 4.3

Non-performing loan to total loan 7.8 10.5 7.8

Cost of funds (annualised) 3.8 4.0 3.9

H1 2017

Nmillion

H1 2016

Nmillion

FY 2016

Nmillion


Other comprehensive income

Items that will never be reclassified to profit or loss - - -

Items that are or may be reclassified subsequently to profit or loss:

Net change in fair value of available-for-sale financial assets (50) (1,618) (409)

Realised fair value adjustments on available-for-sale financial assets

reclassified to income statement

(86) 96 76

Income tax on other comprehensive income - - -

Other comprehensive income for the period net of tax (136) (1,522) (333)

Total comprehensive income for the period 23,976 9,795 28,187

Total comprehensive income attributable to:

Non-controlling interests 1,061 1,836 3,829

Equity holders of the parent 22,915 7,959 24,358

23,976 9,795 28,187

12 13Group results

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Statement of other comprehensive income – Bank

YoY

Change

%

H1 2017

Nmillion

H1 2016

Nmillion

FY 2016

Nmillion

Gross earnings 35 75,394 55,697 121,755


Interest income 51 53,212 35,150 83,267


Non-interest revenue 9 22,001 20,158 37,724

Net fees and commission revenue (26) 9,901 13,384 22,557

Fees and commission revenue (27) 10,082 13,773 23,321

Fees and commission expense 53 (181) (389) (764)

Trading revenue 78 11,754 6,610 14,504

Other revenue >100 346 164 663

Total income 47 60,607 41,336 91,064

Credit impairment charges (65) (13,953) (8,450) (19,803)

Income after credit impairment charges 42 46,654 32,886 71,261


Staff costs (13) (12,924) (11,404) (24,104)


Profit before taxation >100 14,324 5,500 14,907

Direct taxation (94) (671) (347) 123



Non-controlling interests - - - -

Equity holders of the parent >100 13,653 5,153 15,030


H1 2017

Nmillion

H1 2016

Nmillion

FY 2016

Nmillion


Other comprehensive income

Items that will never be reclassified to profit or loss - - -

Items that are or may be reclassified subsequently to profit or loss:

Net change in fair value of available-for-sale financial assets (167) (1,642) (474)

Realised fair value adjustments on available-for-sale financial assets

reclassified to income statement

87 96 (162)

Income tax on other comprehensive income - - -

Other comprehensive income for the period net of tax (80) (1,546) (636)

Total comprehensive income for the period 13,573 3,607 14,394

Total comprehensive income attributable to:

Non-controlling interests - - -

Equity holders of the parent 13,573 3,607 14,394

13,573 3,607 14,394

14 15Group results

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Summarised income statement – Bank

Summarised income statement quarterly analysis – Bank

YTD

Change

%

H1 2017

Nmillion

H1 2016

Nmillion

FY 2016

Nmillion

Assets

Cash and cash equivalents 6 318,944 249,120 301,351

Trading assets >100 85,812 98,067 16,855

Pledged assets 2 28,938 45,509 28,303

Derivative assets 85 26,490 24,939 14,317

Financial investments 19 302,056 262,782 252,823

Assets held for sale - 112 262 112

Loans and advances 2 376,633 403,274 368,229

Loans and advances to banks (43) 8,677 27,638 15,264

Loans and advances to customers 4 367,956 375,636 352,965

Other assets >100 103,301 56,992 39,220

Deferred tax assets (1) 8,579 8,026 8,638

Property and equipment (2) 22,467 25,572 22,962

Intangible assets (12) 628 - 713

Total assets 21 1,273,960 1,174,543 1,053,523

Equity and liabilities

Equity 15 161,465 137,746 140,798

Equity attributable to ordinary shareholders 16 159,496 130,669 137,102

Ordinary share capital - 5,000 5,000 5,000

Ordinary share premium - 65,450 65,450 65,450

Reserves 34 89,046 60,219 66,652

Non-controlling interest (47) 1,969 7,077 3,696

Liabilities 22 1,112,495 1,036,797 912,725

Trading liabilities >100 39,225 45,003 5,325

Derivative liabilities 78 20,999 1,397 11,788

Deposit and current accounts 11 681,370 694,418 614,735

Deposits from banks (10) 48,619 100,775 53,766

Deposits from customers 13 632,751 593,643 560,969

Other borrowings (5) 91,494 105,989 96,037

Current and deferred tax liabilities 11 10,590 5,100 9,555

Subordinated debt 0 28,015 27,051 27,964

Other liabilities 63 240,802 157,839 147,321

Total equity and liabilities 21 1,273,960 1,174,543 1,053,523

QoQ

Change

%

Q2 2017

Nmillion

Q1 2017

Nmillion

H1 2017

Nmillion

Gross income 7 38,893 36,501 75,394


Interest income 14 28,329 24,883 53,212


Non-interest revenue (9) 10,458 11,543 22,001

Net fee and commission revenue 7 5,108 4,793 9,901

Fee and commission revenue 7 5,214 4,868 10,082

Fee and commission expense (41) (106) (75) (181)

Trading revenue (20) 5,226 6,528 11,754

Other revenue (44) 124 222 346

Total income 7 31,374 29,233 60,607

Credit impairment charges (>100) (10,626) (3,327) (13,953)

Income after credit impairment charges (20) 20,748 25,906 46,654


Staff costs (27) (7,232) (5,692) (12,924)


Profit before taxation (76) 2,765 11,559 14,324

Taxation 8 (321) (350) (671)

Profit for the period (78) 2,444 11,209 13,653


Non-controlling interests - - - -

Equity holders of the parent (78) 2,444 11,209 13,653


Key performance indicator

Net interest margin (annualised) 7.7 6.9 6.8

Non-interest revenue to total income 33.3 39.5 36.3

Credit loss ratio (annualised) 11.1 3.6 7.3

Cost-to-income ratio 57.3 49.1 53.3

Return on average equity (annualised) 8.4 39.0 23.7

Return on average assets (annualised) 0.9 4.4 2.5

Non-performing loan to total loan 7.8 10.5 7.8

Cost of funds 3.6 3.6 3.5

16 17Group results

in brief

Business

unit review

Balance sheet

analysis


information

Income statement

analysis

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Other

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Statement of financial position – Group

Group financial position quarterly analysis

QOQ

Change %

2Q 2017

Nmillion

1Q 2017

Nmillion

FY 2016

Nmillion

Assets


Trading assets (12) 85,812 98,039 16,855

Pledged assets (25) 28,938 38,493 28,303



Assets held for sale - 112 112 112


Loans and advances to banks 6 8,677 8,184 15,264


Other assets >100 103,301 40,189 39,220

Deferred tax assets 2 8,579 8,449 8,638


Intangible assets (2) 628 638 713

Total assets 9 1,273,960 1,165,427 1,053,523


Equity 3 161,465 156,048 140,798




Reserves 8 89,046 82,536 66,652

Non-controlling interest (36) 1,970 3,062 3,696

Liabilities 10 1,112,495 1,009,379 912,725

Trading liabilities (15) 39,225 46,003 5,325





Other borrowings 10 91,494 83,147 96,037

Current and deferred tax liabilities (10) 10,590 11,797 9,555


Provisions and other liabilities 67 240,802 144,464 147,321

Total equity and liabilities 9 1,273,960 1,165,427 1,053,523

Statement of financial position – Bank

YTD

Change

%

H1 2017

Nmillion

H1 2016

Nmillion

FY 2016

Nmillion

Assets


Trading assets >100 84,569 96,786 15,657

Pledged assets 2 28,938 45,509 28,303



Assets held for sale - - 262 -


Loans and advances to banks (43) 8,677 27,598 15,264


Other assets >100 94,574 50,581 31,307

Deferred tax assets 0 8,337 7,332 8,334


Intangible assets (12) 628 - 713

Total assets 24 1,229,804 1,127,875 993,757


Equity 12 122,874 97,472 109,317




Reserves 19 78,530 53,128 64,973

Non-controlling interest - - - -

Liabilities 25 1,106,930 1,030,403 884,440

Trading liabilities >100 39,225 45,003 5,325





Other borrowings 15 91,494 105,989 79,633

Current tax liabilities 3 1,928 1,338 1,865


Provisions and other liabilities 69 229,542 147,652 135,426

Total equity and liabilities 24 1,229,804 1,127,875 993,757

18 19Group results

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Business

unit review

Balance sheet

analysis


information

Income statement

analysis

Capital

management

Other

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Statement of changes in equity – Group

Ordinary

share capital

Nmillion

Share

premium

Nmillion

Merger

reserve

Nmillion

Statutory

credit risk

reserve

Nmillion

Available-for-

sale revaluation

reserve

Nmillion

Share-based

payment reserve

Nmillion

AGSMEIS

reserve

Nmillion

Other

regulatory

reserves

Nmillion

Retained

earnings

Nmillion

Ordinary

shareholders’

equity

Nmillion

Non-controlling

interest

Nmillion

Total

equity

Nmillion

Balance at 1 January 2017 5,000 65,450 (19,123) 1,025 942 36 - 33,615 50,157 137,102 3,696 140,798

Total comprehensive(loss)/income for the period (130) - - 23,045 22,915 1,061 23,976

Profit for the period - - - - - - - 23,045 23,045 1,067 24,112

Other comprehensive (loss)/income after tax for the period (130) - - - - (130) (6) (136)

Net change in fair value on available-for-sale financial assets - - - - (44) - - - (44) (6) (50)

Realised fair value adjustments on available-for-sale financial assets - - - - (86) - - - (86) - (86)

Statutory credit risk reserve - - - - - - - - - - -

Transfer to statutory reserves - - - - - - 749 (749) - - -

Transactions with shareholders, recorded directly in equity - - - - - (21) - - (500) (521) (2,788) (3,309)

Equity-settled share-based payment transactions - - - - - (21) - - - (21) (21)

Dividends paid to equity holders - - - - - - - - (500) (500) (2,788) (3,288)

Balance at 30 June 2017 5,000 65,450 (19,123) 1,025 812 15 749 33,615 71,953 159,496 1,969 161,465

Balance at 1 January 2016 5,000 65,450 (19,123) 6,684 1,226 56 - 26,218 38,215 123,726 5,241 128,967

Total comprehensive income/(loss) for the period - - - - (1,505) - - - 8,407 6,902 1,836 8,738

Profit for the period - - - - - - - - 8,407 8,407 1,853 10,260

Other comprehensive income/(loss) after tax for the period - - - - (1,505) - - - - (1,505) (17) (1,522)

Net change in fair value on available-for-sale financial assets - - - - (1,601) - - - - (1,601) (17) (1,618)

Realised fair value adjustments on available-for-sale financial assets - - - - 96 - - - - 96 - 96

Statutory credit risk reserve - - - - - - - - - - -

Transfer to statutory reserves - - - - - - - - - - -

Transactions with shareholders, recorded directly in equity - - - - 40 - - 40 - 40

Equity-settled share-based payment transactions - - - - 40 - - 40 - 40

Transfer of vested portion of equity settled share based payment to

retained earnings

- - - - - - - - - -

Dividends paid to equity holders - - - - - - - - - -

Balance at 30 June 2016 5,000 65,450 (19,123) 6,684 (279) 96 26,218 46,622 130,668 7,077 137,745

20 21Group results

in brief

Business

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Balance sheet

analysis


information

Income statement

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Other

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Statement of changes in equity – Bank

Group

Ordinary

share capital

Nmillion

Share

premium

Nmillion

Statutory credit

risk reserve

Nmillion

Available-for-

sale revaluation

reserve

Nmillion

Share-based

payment reserve

Nmillion

SMIEIS

reserves

Nmillion

AGSMIEIS

reserves

Nmillion

Statutory

reserves

Nmillion

Retained

earnings

Nmillion

Ordinary

shareholders’

equity

Nmillion

Balance at 1 January 2017 1,875 42,469 789 184 28 1,039 - 22,153 40,780 109,317

Total comprehensive income for the period - - (80) - - - - 13,653 13,573

Profit for the period - - - - - - - - 13,653 13,653

Other comprehensive income after tax for the year - - - (80) - - - - - (80)

Net change in fair value on available-for-sale financial assets - - - (167) - - - - - (167)

Realised fair value adjustments on available-for-sale financial assets - - - 87 - - - - - 87

Income tax on other comprehensive income - - - - - - - - - -

Statutory credit risk reserve - - - - - - - - - -

Transfer to statutory reserves - - - - - - 749 - (749) -

Transactions with shareholders, recorded directly in equity - - - - (16) - - - - (16)

Equity-settled share-based payment transactions - - - - (16) - - - - (16)

Transfer of vested share options to retained earnings - - - - - - - - - -


Balance at 30 June 2017 1,875 42,469 789 104 12 1,039 749 22,153 53,684 122,874

Balance at 1 January 2016 1,875 42,469 6,684 820 32 1,039 - 19,907 22,091 94,917

Total comprehensive income for the period - - (1,546) - - 5,153 3,607

Profit for the period - - - - - - - - 5,153 5,153

Other comprehensive income after tax for the period - - (1,546) - - - - (1,546)

Net change in fair value on available-for-sale financial assets - - - (1,642) - - - - - (1,642)

Realised fair value adjustments on available-for-sale financial assets - - - 96 - - - - - 96

Income tax on other comprehensive income - - - - - - - - - -

Statutory credit risk reserve - - - - - - - - - -

Transfer to statutory reserves

Transactions with shareholders, recorded directly in equity - - - - - - - - - -

Equity-settled share-based payment transactions - - - - - - - - - -

Transfer of vested share options to retained earnings - - - - - - - - - -


Balance at 30 June 2016 1,875 42,469 6,684 (726) 32 1,039 - 19,907 27,244 98,524

22 23Group results

in brief

Business

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Balance sheet

analysis


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Statement of cashflows – Group Statement of cashflows – Bank

H1 2017

Nmillion

H1 2016

Nmillion

Unaudited

Net cash flows from operating activities 56,227 77,659

Cash flows used in operations 20,581 62,165

Profit before tax 29,169 15,682

Adjusted for: (26,597) (9,295)

Credit impairment charges on loans and advances 13,953 8,450

Depreciation of property and equipment 2,010 1,830

Amortisation of intangible asset 23 -

Dividend income (50) (121)

Equity-settled share-based payments (21) 40

Non-cash flow movements in other borrowings (1,546) -

Non-cash flow movements in subordinated debt 51 3,352

Impairment of intangible asset 62

Interest expense 15,693 13,864

Interest income (56,728) (36,713)

Loss/(gain) on sale of property and equipment (44) 3

Increase/(decrease) in income-earning assets (175,449) (126,535)

Increase/(decrease) in deposits and other liabilities 193,458 182,313

Dividends received 45 109

Interest paid (15,541) (13,864)

Interest received 55,145 36,713

Direct taxation paid (4,003) (7,464)

Net cash flows from/(used in) investing activities (50,841) (103,435)

Capital expenditure on:

- property (36) (131)

- equipment, furniture and vehicles (1,499) (1,731)

Proceeds from sale of property, equipment, furniture and vehicles 63 35

(Purchase)/sale of financial investments (49,369) (101,608)

Net cash flows (used in)/from financing activities (6,285) 24,882

Proceeds from addition to other borrowings 24,803 24,882

Repayment of other borrowings (27,800) -

Dividends paid (3,288) -

Net increase/(decrease) in cash and cash equivalents (899) (894)

Effect of exchange rate changes on cash and cash equivalents 451 19,338

Cash and cash equivalents at beginning of the period 191,761 107,398

Cash and cash equivalents at end of the period 191,313 125,842

H1 2017

Nmillion

H1 2016

Nmillion

Unaudited

Net cash flows from operating activities 52,619 79,613

Cash flows used in operations 15,775 60,391

Profit before tax 14,324 5,500

Adjusted for: (24,486) (7,930)

Credit impairment charges on loans and advances 13,953 8,450

Depreciation of property and equipment 1,645 1,566

Amortisation of intangible assets 23 -

Dividend income (50) (121)

Items of intangible assets written off/expensed 62 0

Equity-settled share-based payments (16) 4

Non-cash flow movements in other borrowings (1,492) 0

Non-cash flow movements in subordinated debt 37 3,352

Interest expense 14,606 13,972

Interest income (53,212) (35,150)

Gains on disposal of property and equipment (42) (3)

Increase in loans and other assets (174,710) (123,401)

Increase in deposits and other liabilities 200,647 186,222

Dividends received 45 109

Interest paid (14,343) (13,957)

Interest received 51,748 33,891

Direct taxation paid (606) (821)

Net cash flows from/(used in) investing activities (58,643) (101,133)

Capital expenditure on:

- property (35) (131)

- equipment, furniture and vehicles (1,058) (1,646)

Proceeds from sale of property, equipment, furniture and vehicles 57 36

(Purchase)/sale of financial investments (57,607) (99,392)

Net cash flows (used in)/from financing activities 13,353 24,882

Proceeds from addition to other borrowings 24,803 24,882

Repayment of other borrowings (11,450) -

Proceed from issue of subordinated debt - -

Dividends paid - -

Net increase/(decrease) in cash and cash equivalents 7,329 3,362

Effect of exchange rate changes on cash and cash equivalents 410 19,338

Cash and cash equivalents at beginning of the period 179,722 89,862

Cash and cash equivalents at end of the period 187,461 112,562

24 25Group results

in brief

Business

unit review

Balance sheet

analysis


information

Income statement

analysis

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Segmental structure for key business units

Stanbic IBTC Group

Personal and Business Banking Banking and other financial services

to individual customers and small-to-

medium-sized enterprises.

What we offer:

Mortgage lending

• Residential accomodation loans to

mainly personal market customers.

Instalmental sale and finance leases

• Finance of vehicles for personal

market customers.

• Finance of vehicles and equipment

in the business market.

Card Products

• Credit card facilities to individuals

and businesses (credit card issuing).

• Merchant transaction acquiring

services (card acquiring).

Transactional products

• Comprehensive suite of transactional,

savings and investment products.

This includes deposit taking activities

and electronic banking facilities.

Lending products

• Lending products offered to both

personal and business markets.

• Business lending offerings constitute

a comprehensive suite of lending

product offerings, structured

working capital finance solutions

and commercial property finance

solutions.

Corporate and Investment Banking Corporate and investment banking

services to government parastatals,

larger corporates, financial institutions

and international counterparties.

What we offer:

Global markets

• Fixed income instruments.

• Money market.

• Equities.

• Foreign exchange.

• Research.

Investment banking

• Equity capital market.

• Debt capital market.

• Financial advisory.

• Real Estate Finance.

• Mining, Energy and Infrastructure.

• Diversified Lending and Leverage.

Transactional products and services

• Investor services (asset custody).

• Transactional banking.

• Trade finance.

Coverage and distribution

• Client facing sales activities within

CIB division covering conglomerate

& diversified industries; consumer,

financial institutions; oil & gas, power &

infrastructure and telecommunications,

media & technology sector.

WealthInvestment management in form

of non-pension asset management,

pension asset management, trusteeship

and estate management.

What we offer:

Pension fund administration

• Retirement savings accounts.

• Gratuity schemes for companies.

Asset management

• Mutual funds.

• Portfolio management for High Net

worth individuals.

Trustee services

• Private trust.

• Corporate trust.

Insurance brokerage

• Life assurance.

• Group life assurance.

• Travel health insurance.

• General insurance.

27Group results

in brief

Business

unit review

Balance sheet

analysis


information

Income statement

analysis

Capital

management

Other

information

2729303539

Segmental structure for key business unitsSegmental income statementPersonal & Business BankingCorporate & Investment BankingWealth

Business unit review

Business unit

review

H1 2017 H1 2016

Total income (Nmillion) 22,743 21,487

Total income (% change) 6 47.2

Total income contribution (%) 28.0 37.7

Cost-to-income ratio (%) 85.7 78.0

Credit loss ratio (%) 12.2 4.2

Gross loan growth (%) (8.7) (1.2)

Deposit growth (%) 9.1 14.2

H1 2017 H1 2016


Total income (% change) 94.6 (1.7)

Total income contribution (%) 49.6 36.3


Credit loss ratio (%) 4.4 4.2

Gross loan growth (%) 14.2 13.7

Deposit growth (%) 19.1 26.7

H1 2017 H1 2016


Total income (% change) 23 16.1

Total income contribution (%) 22.4 26


Assets under management growth (%) 16.4 8.2

Retirement savings accounts growth (%) 3.3 2.7

Personal & Business Banking% of group gross income

Corporate & Investment Banking% of group gross income

Wealth% of group gross income

Segmental income statement

Personal & Business Banking Corporate & Investment Banking Wealth

Change

%

H1 2017

Nmillion

H1 2016

Nmillion

Change

%

H1 2017

Nmillion

H1 2016

Nmillion

Change

%

H1 2017

Nmillion

H1 2016

Nmillion

Gross income 21 29,495 24,432 52 48,172 31,638 30 19,350 14,861

Interest income 40 22,886 16,314 63 30,975 18,989 >100 2,867 1,410

Interest expense >100 (6,752) (2,945) (28) (7,846) (10,919) 0 (1,095) -

Net interest income 21 16,134 13,369 >100 23,129 8,070 26 1,772 1,410

Non-interest revenue (19) 6,609 8,118 36 17,197 12,649 23 16,483 13,451

Net fee and commission revenue (22) 6,285 8,074 (13) 5,145 5,891 22 16,463 13,441

Trading revenue 0 - - 81 11,950 6,607 16 -

Other revenue >100 324 44 (32) 102 151 (60) 4 10

Total income 6 22,743 21,487 95 40,326 20,719 23 18,255 14,861

Credit impairment charges >100 (8,421) (3,362) 9 (5,532) (5,088) 0 - -

Income after credit impairment charges (21) 14,322 18,125 >100 34,794 15,631 23 18,255 14,861

Operating expenses 16 (19,501) (16,754) 16 (13,627) (11,735) 14 (5,074) (4,446)

Staff costs 9 (9,284) (8,481) 28 (4,729) (3,703) 13 (2,479) (2,194)

Other operating expenses 23 (10,217) (8,273) 11 (8,898) (8,032) 15 (2,595) (2,252)

Profit before tax >(100) (5,179) 1,371 >100 21,167 3,896 27 13,181 10,415

Tax (83) (61) (357) 21 (737) (607) 25 (4,259) (3,401)

Profit after tax >(100) (5,240) 1,014 >100 20,430 3,289 27 8,922 7,014

28 29Group results

in brief

Business

unit review

Balance sheet

analysis


information

Income statement

analysis

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Other

information


Bu

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Segmental structure for key business units (continued)

Personal & Business Banking (PBB)

Personal and Business Banking (PBB) deals with

the retail arm of group’s business. PBB provides

services to individual customers, high networth

individuals (HNIs) and the commercial and small

and medium scale enterprises (SME) business

segments. Personal and Business Banking

supports everyday banking needs of individuals

and businesses – receiving, saving and making

payments through our network of branches and

self-service digital channels. Overlaying these

horizontals is a strong relationship management

focus to ensure differentiated customer

experience for our customer segments.

The focus of PBB is to provide appropriate,

affordable, convenient and accessible financial

solutions to customers, through passionate and

customer focused employees nationwide. It

offers the following products; vehicle and asset

finance, unsecured and secured personal and

business loans, mortgage loans, a range of trade

finance products and various current, savings

and investment offerings.

PBB is divided into two business lines for

efficient service delivery - Personal Banking

and Business Banking. Personal Banking

focuses on banking services to individuals

through lifecycle management and offering

bespoke services to high networth individuals

by handling their wealth portfolio needs both

locally and abroad. It provides solutions that

meet individual need as these needs change.

Business Banking focuses on two segments

- small and medium scale enterprises and

commercial, providing them business solutions

to support their growing business needs.

Financial performance

PBB’s gross income grew by 21% to N29.5

billion (H1 2016: N24.4 billion), on the back

of 40% growth in interest income.

Interest income grew by 40% to N22.9

billion (H1 2016: N16.3 billion) on the back of

increase in investments and returns. Interest

expense increased by 129% to N6.8 billion

from N2.9 billion in H1 2016. The increase is

as a result of the increased deposits acquired

during the period. Consequently, Net interest

income increased by 21% to N16.1 billion from

N13.4billion.

Non-interest revenue, earned majorly

from fees and commission, declined by 19%

to N6.6 billion (H1 2016: N8.1 billion) on the

back of regulatory induced reduction in fees

and commission and the decline in economic

transactions. Total income however increased

by 6% to N22.7 billion from N21.5 billion in

H1 2016.

Credit impairment charges grew by over

100% to N8.4 billion in H1 2017 (H1 2016:

N3.4 billion) as a result of the challenging macro

environment and attendant second order risks

including the knock on effects of the prolonged

FX scarcity, high inflation levels, salary

arrears, job losses and low purchasing power,

which have reduced clients’ capacity to meet

existing obligations. The declining oil prices

and vandalization of oil pipelines also impacted

businesses negatively. The increase in credit

impairment also resulted in higher credit loss

ratio of 12.2% from 4.2% in H1 2016.

Operating expenses increased by 16% to

N19.5 billion (H1 2016: N16.8 billion). Staff

cost grew by 9% lower than inflation, while

other operating expenses increased by 23%

as a result of branch maintenance expenses,

marketing expenses to increase brand

awareness and insurance cost on securing

customer deposits. PBB’s cost-to-income ratio

deteriorated to 85.7% from 78.0% in H1 2016

due to increased operating expenses.

PBB recorded loss after tax of N5.2 billion

declining by over 100% from profit of N1.0

billion in H1 2016.

PBB’s gross loans declined by 9% to close

at N139 billion (FY 2016: N152 billion).

The slow growth is on the back of tightened

lending conditions and low customer appetite

for loans due to current economic situation.

Non-performing loans in PBB declined by 16%

to N15.7 billion following the write-off of fully

provisioned NPLs.

Customer deposits grew by 9% to N385

billion from N353 billion in FY 2016 on the

back of continued growth in customer numbers

and need to increase our cheap deposit base.

Deposit mix improved to 69% from 63% in FY

2016, as the ratio lower priced deposit to total

deposits.

Performance highlightsChange % H1 2017 H1 2016 FY 2016

Net interest income Nmillion 21 16,134 13,369 29,964

Non-interest revenue Nmillion (19) 6,609 8,118 14,512

Credit impairment charges Nmillion >100 (8,421) (3,362) (9,504)

Operating expenses Nmillion (16) (19,501) (16,754) (36,656)

(Loss)/profit before tax Nmillion >(100) (5,179) 1,371 (1,684)

(Loss)/profit after tax Nmillion >(100) (5,240) 1,014 (1,613)

Gross loans & advances Nmillion (9) 139,092 162,027 152,360

Deposit liabilities Nmillion 9 385,349 289,020 353,189

Cost-to-income % 85.7 78.0 82.4



Loan to deposit % 36.1 56.1 43.1

Non-performing loans to total loans & advances % 11.3 11.5 12.3

Other key business statistics

Business infrastructure

Branch network Number 0 178 178 178

ATMs Number (1) 553 543 561

Net interest income


Net interest income and net interest revenue

H1 2013 H1 2014 H1 2015 H1 2016 H1 2017

2,000

0

4,000

6,000

8,000

10,000

18,000

16,000

12,000

14,000

Nmillion

13,369

8,118

16,134

6,609

11,052

3,547

11,045

4,230

8,229

3,338

30 31Group results

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Business

unit review

Balance sheet

analysis


information

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analysis

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Other

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Bu

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Quarterly analysis of performance

Q2 2017 Q1 2017 H1 2017

Net interest income Nmillion 7,757 8,377 16,134

Non-interest revenue Nmillion 3,240 3,369 6,609

Credit impairment charges Nmillion (6,912) (1,509) (8,421)

Operating expenses Nmillion (10,063) (9,438) (19,501)

Profit/(loss) before tax Nmillion (5,978) 799 (5,179)

Gross loans & advances Nmillion 139,092 147,321 139,092

Deposit liabilities Nmillion 385,349 378,477 385,349

Cost-to-income % 91.5 80.4 85.7




Non-performing loans to total loans & advances % 11.3 15.6 11.3

Factors impacting the results

Favourable

• Growth in net interest income is on the back of favourable yield on

assets and impact of current and savings deposits growth.

• Continued growth in customer deposits, supported by growth

in number of customers.

Transactional and lending products

• Decline in overdrafts to small and medium

scale businesses to support their working

capital requirements

• Term loans declined as some customers

paid down on their facilities.

• Impairment charges increased on both

performing and non-performing loans

due to economic realities

Adverse

• Increase in operating expenses as a result of growth in marketing

and advertising expenses, deposit and other insurance expenses and

AMCON sinking fund contribution.

• Reduction in transaction fees as directed by Central Bank of Nigeria.

• Increase in credit impairment charges.

Instalment sale and finance leases

• Asset quality deteriorated as non-

performing loans increased to N2.97

billion and non-performing loans ratio

increased to 17% (FY 2016: 11%). This

is due to classification of loans in haulage

and logistics business. This is linked to the

general economic slowdown evidenced in

the consumer sector.

Mortgage lending

• We witnessed decline in loan book which

can be attributed to the macro-economic

challenges the country is facing.

• Non-performing loans increased by over

12% to close at N325 million due to

increase in interest rate. Consequently, the

mortgage loan book’s non-performing loans

to total loans ratio worsened to 4% from

3% in FY 2016.

Breakdown of loans and advances to customers

Change

%

H1 2017

Nmillion

H1 2016

Nmillion

FY 2016

Nmillion

Gross loans and advances (9) 139,092 162,027 152,360

Mortgage (6) 8,370 8,918 8,924

Instalment sale & finance leases 8 17,418 20,775 16,123

Overdrafts (25) 21,128 21,542 28,086

Term loans (7) 92,176 110,793 99,226

Provisions (15) (12,637) (16,258) (14,839)

Specific credit impairment (19) (9,146) (12,808) (11,329)

Portfolio credit impairment (1) (3,491) (3,449) (3,510)

Net loans and advances (8) 126,455 145,770 137,521

Breakdown of non-performing loans

Overdrafts (24) 3,191 2,462 4,183

Term loans (27) 9,195 11,069 12,537

Instalment sale and finance leases 75 2,970 4,674 1,697

Mortgage loans 26 325 487 258

Total (16) 15,681 18,691 18,675

Loans and advances

32 33Group results

in brief

Business

unit review

Balance sheet

analysis


information

Income statement

analysis

Capital

management

Other

information


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Personal & Business Banking (continued)

Deposit breakdown

Change

%

H1 2017

Nmillion

H1 2016

Nmillion

FY 2016

Nmillion

Current deposits 17 221,411 143,849 188,877

Savings deposits 12 43,167 34,532 38,630

Call deposits (56) 4,250 2,935 9,687

Term deposits 0 116,521 107,703 115,996

Total deposits and current accounts 9 385,349 289,020 353,189

Deposit liabilities

• Growth in deposit book driven by growth customer numbers and need

to get cheaper funding

• Increase in current and savings accounts on the back of continued

execution of customer acquisition initiatives focused at individuals

and businesses with stable income.

• Lower priced deposits accounted for 69% of total deposits and

cushioned the impact of increased cost of funds due to expensive

term deposits acquired.

Corporate & Investment Banking (CIB)

Corporate and Investment Banking (CIB)

comprises four segment/units: Investment

Banking (IB), Global Markets (GM),

Transactional Products and Services (TPS) and

Client Coverage (CC).

Our Investment Banking team provides,

through Stanbic IBTC Capital Limited,

corporate finance and debt advisory services to

corporate and government entities.

The Global Markets team comprises

traders, sales managers and analysts of varying

specialisation in equities, fixed income, foreign

exchange, and money markets. Within GM,

Stanbic IBTC Stockbrokers Limited provides

world-class stockbroking services to local as

well as foreign investors in the Nigerian capital

markets and is the largest stockbroking house

in Nigeria. Also within GM, our highly respected

team of macroeconomic and equity research

analysts provide insights on the domestic

and international markets of our portfolio

investment clients.

Transactional Product and Services offers

standardised and tailored transactional

products and services including trade

finance solutions, working capital and cash

management solutions.

Our Client Coverage team manages

corporate relationships and is the main point

of contact with our clients. The team members

are skilled at identifying client needs and

requirements, and at aligning these with the

appropriate product houses for execution.


CIB’s total income was up 95% to N40.3billion

in H1 2017 (H1 2016: N20.7 billion), on the

back of a 63% growth in interest income.

Interest income increased by 63% to N31.0

billion (H1 2016:N19.0 billion). Interest income

growth is supported by increase in income from

investment securities due to favourable yields,

increase in income from loans and advances

on the back of loan growth and income from

interbank placement. Interest expense declined

by 28% to N7.8 billion from N10.9 billion

recorded in H1 2016. This is as a result of

high volume of cheap deposits recorded in the

deposit book. This led to an increase of over

100% in net interest income to N23.1 billion

(H1 2016: N8.07 billion).

Non-interest revenue increased by 36% to

N17.2 billion from N12.6 billion recorded in H1

2016. The increase was largely on the back of

trading revenue increase which came on the

back of the introduction of IEFX window. Net

fee and commission closed at N5.1 billion (H1

2016: N5.9 billion) as a result of regulatory

induced reduction in transaction fees and

conversion of deal pipeline in the investment

banking business.

Trading revenue was up 81% to N11.95

billion in H1 2017 (H1 2016: N6.6 billion).

The introduction of the IEFX window has

improved foreign exchange liquidity which in

turn impacted other product markets and the

macro-economy positively.

Credit impairment charge increased by 9%

to N5.5 billion from N5.1 billion in H1 2016.

The increase in credit impairments applied to

both performing and non-performing loans.

The decline in economic activities has resulted

in strain on some sectors of the economy

especially the oil and gas and telecoms. In line

with these economic realities, the group had to

increase its provisioning on loans and advances.

CIB maintained cost discipline in H1 2017

though operating expenses increased by 16%

to N13.6 billion from N11.7 billion in H1 2016.

Staff cost increased by 28% to N4.7 billion

from N3.7 billion in first half of 2017 due to

inflation related salary adjustment, while other

operating expenses increased by 11% to N8.9

billion (H1 2016: N8.0 billion) as a result of

growth in information technology expense to

drive efficient service delivery and increase

deposit insurance expenses. Profit before tax

was up by over a 100% to N21.2 billion, while

profit after tax also increased by over a 100%

to N20.4 billion.

Gross loans and advances grew by 14%

y-o-y to N255 billion in H1 2017 (FY 2016:

N223 billion). The growth was driven by 48%

and 11% growth in overdraft and term loans

to support customer’s working capital. CIB’s

asset quality deteriorated as non-performing

loans increased significantly to N15.2 billion

(FY 2016: Nil). Consequently, non-performing

loans to total loans ratio worsened to 6.0%

from nil position in FY 2016. The decline in

asset quality is primarily due to classification

of a client in the Oil & Gas sector whose

operations had been disrupted by militancy

action resulting in closure of the Trans

Forcados Pipeline.

Deposit liabilities grew to N247 billion,

representing a 19% increase over N207.8

billion achieved in FY 2016. The increase in

deposits is as a result of growing customer

relations.

34 35Group results

in brief

Business

unit review

Balance sheet

analysis


information

Income statement

analysis

Capital

management

Other

information


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Personal & Business Banking (continued)

10

0

50,000

H1 2015 FY 2015 H1 2016 FY 2016 H1 2017

150,000

100,000

200,000

250,000

400,000

350,000

300,000

Nmillion

0

20

40

60

80

120

100

%

262,640

215,451240,390

207,780222,956

254,597247,402245,060

304,623

80

107 103354,106

90

74

Gross loans & advances Net interest income

Deposit liabilities Non-interest revenue

Loan to deposit ratio


Net interest income Nmillion >100 23,129 8,070 24,202

Non-interest revenue Nmillion 36 17,197 12,649 25,308

Credit impairment charges Nmillion 9 (5,532) (5,088) (10,299)

Operating expenses Nmillion 16 (13,627) (11,735) (22,492)

Profit before tax Nmillion >100 21,167 3,896 16,719

Gross loans and advances Nmillion 14 254,597 245,060 222,956

Deposit liabilities Nmillion 19 247,402 304,623 207,780

Cost-to-income % 33.8 56.6 45.4





Investor services

Assets under custody Nbillion 26 3,648 1,916 2,900

Quarterly analysis of performance

Q2 2017 Q1 2017 H1 2017

Net interest income Nmillion 13,505 9,624 23,129


Credit impairment charges Nmillion (3,714) (1,818) (5,532)


Profit before tax Nmillion 9,922 11,245 21,167

Gross loans & advances Nmillion 254,597 218,148 254,597

Deposit liabilities Nmillion 247,402 214,810 247,402

Cost-to-income % 37.6 29.3 33.8



Loan to deposit % 102.9 101.6 102.9


Investor services

Assets under custody Nmillion 3,648 3,049 3,648


Favourable

• Growth in loan book resulting in increase in interest income.

• Favourable yields on investment securities impacting positively on

interest income.

• Increase in rates impacting favourably on interbank placements.

• Decline in interest expense as a result of improved CASA mix.

• Improved FX liquidity has aided capital market activities which has

impacted our custody and capital market business.

Adverse

• Increase in credit impairment charges impacted negatively on profits.

• Strong competition for good quality credits.

• Reduction in transaction fees by Central Bank.

11

0H1 2013 H1 2014 H1 2015 H1 2016 H1 2017

5,000

10,000

15,000

25,000

20,000

Nmillion

17,197

13,497

23,129

12,649

8,070

11,517

9,562

13,551

8,749

10,921

Gross loans and customer deposits

CAGR (H1 2015-H1 2017): Gross loans: (1%)

Customer deposits: (9%)

Net interest income and non-interest revenue

CAGR (H1 2013-H1 2017): Net interest income: 28%

Non-interest revenue: 6%

36 37Group results

in brief

Business

unit review

Balance sheet

analysis


information

Income statement

analysis

Capital

management

Other

information


Bu

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Corporate & Investment Banking (continued)

• Growth in deposits is as a result of growing customer relations.

Breakdown of deposits to customers

Change

%

H1 2017

Nmillion

H1 2016

Nmillion

FY 2016

Nmillion


Call deposits 42 46,197 27,990 32,616

Term deposits 4 85,552 196,995 82,517


Deposit liabilities

• Deposit mix improved significantly as ratio of demand deposit to total

deposits increased to 47% from 45% in FY 2016.

Global markets

• Favourable yields on investment securities

increased interest income.

• Increase in income from foreign exchange

trading as a result of the introduction of the

IEFX window

• Improved capital market performance

resulting from improved foreign exchange

activities.

Investment banking

• Decline in fees and commissions revenue

resulting from slow conversion of deal

pipeline due to slow economic activities.

• Leverage on resources across the Standard

Bank group to execute complex transactions

in most sectors of the Nigerian economy and

this provides an edge over other investment

banking companies.

Transactional products and services

• Regulatory induced reduction in transaction

charges resulted in decline in fees and

commissions revenue

• Growth in overdraft loans to finance working

capital in manufacturing companies and

trading facilities to large trading companies

with resultant fees generated from their

usage of the facilities.

• The Custody business asset under

management increased by 26% to N3.64

trillion (FY 2016: N2.9 trillion) as a result

of improved capital market activities and

foreign exchange liquidity.

• Increase in non-performing loans due to loans in the oil and gas sector.

Breakdown of loans and advances

to customers

Change

%

H1 2017

Nmillion

H1 2016

Nmillion

FY 2016

Nmillion

Gross loans and advances 14 254,597 245,060 222,956

Instalment sale & finance leases 24 1,420 1,531 1,150

Overdrafts 48 28,653 19,748 19,385

Term loans 11 224,523 223,781 202,422

Provisions (72) (13,095) (15,194) (7,592)

Specific credit impairment - (5,080) (7,904) -

Portfolio credit impairment 6 (8,015) (7,290) (7,592)

Net loans and advances 12 241,502 229,866 215,364

Breakdown of non-performing loans

Overdrafts - - 268 -

Term loans >100 15,204 9,133 -

Instalmental sale and finance leases - - - -

Total non-performing loans - 15,204 9,401 -

Loans and advances

Wealth

Wealth group focuses primarily on pension

administration, private non-pension asset

management, trusteeship and estate planning

business and insurance brokerage business

which we recently added. The pension

administration is managed through Stanbic IBTC

Pension Managers Limited, the non-pension

asset management is managed by Stanbic IBTC

Asset Management Limited, trusteeship and

estate management is managed by Stanbic IBTC

Trustees Limited and insurance brokerage by

Stanbic IBTC Insurance Brokerage Limited.

The wealth business model is primarily

focused on assisting clients in investing in a

variety of asset classes, including fixed income

and equities markets to accumulate and

preserve wealth.


Wealth business recorded a gross income of

N19.4 billion, representing a 30% increase from

N14.9 billion in H1 2016. The growth is on

the back of increased income from investment

in money market securities and non-interest

revenue.

Non-interest revenue, resulting from fund

management fees and other income, increased

by 23% to N16.5 billion (H1 2016: N13.5

billion). Continued growth in assets under

management and increase in pension clients

remains the major drivers of the increase in non-

interest revenue. Pension assets grew by 12% to

close at N2.1 trillion from N1.9 trillion recorded

in FY 2016, while the number of Retirement

Savings Accounts (RSAs) grew by 3%.

The non-pension assets under management

increased by 64% to N316.3 billion (FY

2016: N192.8 billion). The increase is driven

by increased subscription from investors and

growth in investment income.

Total income grew by 23% to N18.3 billion

from N14.9 billion recorded in H1 2016.

Operating expenses was up 14% to N5.1

billion from N4.4 billion in H1 2016, driven by

13% growth in staff cost and 15% increase in

other operating expenses. Staff cost grew as a

result of inflation adjustment on staff salaries,

while other operating expenses increased as a

result of growth in marketing and advertising

expenses and increases in premises maintenance

expenses. Despite the growth in operating

expenses, cost-to-income ratio improved to

27.8% from 29.9% recorded in H1 2016. Profit

before tax increased by 27% to N13.2 billion

YoY, while profit after tax also increased by 27%

to N8.9 billion.

Profit before taxCAGR (H1 2013 – H1 2017): 26%

Total operating incomeCAGR (H1 2013 – H1 2017): 22%10

0H1 2013 H1 2014 H1 2015 H1 2016 H1 2017

20,000

18,000

Nmillion

8,000

6,000

4,000

2,000

12,000

10,000

14,000

16,000

8,192 10,747 12,803 14,861 18,255

10

0H1 2013 H1 2014 H1 2015 H1 2016 H1 2017

14,000

Nmillion

4,000

2,000

8,000

6,000

10,000

12,000

5,259 7,290 8,704 10,415 13,181

38 39Group results

in brief

Business

unit review

Balance sheet

analysis


information

Income statement

analysis

Capital

management

Other

information


Bu

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Corporate & Investment Banking (continued)



Non-interest revenue Nmillion 23 16,483 13,451 28,374



Assets under management Nmillion 16 2,417,210 1,902,582 2,076,423

Retirement savings accounts Number 3 1,557,888 1,467,166 1,508,040

Cost to income ratio % 27.8 29.9 30.9

Quarterly analysis of performanceQ2 2017 Q1 2017 H1 2017

Net interest income Nmillion 893 879 1,772



Profit before tax Nmillion 6,599 6,582 13,181

Assets under management Nmillion 2,417,210 2,176,376 2,417,210

Retirement savings accounts Number 1,557,888 1,543,175 1,557,888

Cost to income ratio % 30.5 24.9 27.8

Assets under management (AuM) and Retirement savings accountCAGR (H1 2015-H1 2017): Pension management (AuM): 9%

Asset management (AuM): 22%

Retirement savings accounts: 3%


Favourable

• Increased contribution from existing contributors and continued

growth in pension funds under management as pension clients

continue to increase impacted positively on revenues.

• Favourable yields on investment securities contributed to interest

income growth

• Continued improvement in operational efficiency resulting lower

operating expenses and cost-to-income ratio

Adverse

• Unpaid salaries of government workers impacted negatively on growth

in assets under management

• Increase in staff costs due to regulators directive on non-full time staff

41Group results

in brief

Business

unit review

Balance sheet

analysis


information

Income statement

analysis

Capital

management

Other

information40 Stanbic IBTC Analysis of financial results for the 6 months ended 30 June 2017

Bu

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Wealth (continued)

Income statement

analysis

424446484951

Overview of group incomeNet interest income and margin analysisNon-interest revenueCredit impairment chargesOperating expensesTaxation

Income statement analysis

Overview of group income

Drivers of group income

0

30,000

20,000

10,000

40,000

50,000

60,000

70,000

90,000

80,000

Nmillion

56,728

Interest income

(15,693)

Interestexpense

40,289

Non-interestrevenue


Operatingexpenses

Profit beforetaxation

Taxes Profit aftertaxation

(38,202) 29,169

(5,057)

24,112

(13,953)

Interest based revenue

Non-interest based revenue

10

0H1 2013 H1 2014 H1 2015 H1 2016 H1 2017

120,000

Nmillion

60,000

100,000

80,000

20,000

40,000

54,509 61,715 68,295 71,320 97,198

10

0H1 2013 H1 2014 H1 2015 H1 2016 H1 2017

60,000

Nmillion

20,000

40,000

30,000

10,000

50,000

30,382

24,127 27,718

33,997

26,577

41,718

34,607

36,713 40,470

56,728

Interest based revenue and non-interest based revenueCAGR (H1 2013 – H1 2017): Interest based revenue: 17%

Non-interest based revenue: 14%

Gross revenueCAGR (H1 2013 – H1 2017): 16%

10

0 0H1 2013 H1 2014 H1 2015 H1 2016 H1 2017

90,000

80,000

Nmillion %

20,000

40,000

30,000

10,000

60,000

70,000

50,000

35.0

10.0

20.0

15.0

5.0

25.0

30.0

42,005

10,185 16,184

50,494

9,695

48,481

11,317

24,112

57,067 24.2%

32.1%

20.0%

19.8%

81,324

29.6%

10

(10)H1 2013 H1 2014 H1 2015 H1 2016 H1 2017

50

%

10

0

30

40

20

35

12

(4)

7

18

6

20

10

43

16

Total income Total income growth

Profit after tax Total cost growth

Profit after tax/total income

Total income and profitability Income growth Vs. Cost growth

Total income contribution by business unit

Income statement summary

Change %

YOY

H1 2017 H1 2016 FY 2016


Non-interest income Nmillion 18 40,289 34,218 68,194

Credit impairment charges Nmillion 65 (13,953) (8,450) (19,803)



Profit after tax Nmillion >100 24,112 11,317 28,520

H1 2016

Personal & Business Banking 38%

Corporate & Investment Banking 36%

Wealth 26%

Personal & Business Banking 28%

Corporate & Investment Banking 50%

Wealth 22%

H1 2017

42 43Group results

in brief

Business

unit review

Balance sheet

analysis


information

Income statement

analysis

Capital

management

Other

information


Inco

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stat

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Net interest income and margin analysis

Breakdown of net interest income Change

%

H1 2017

Nmillion

H1 2016

Nmillion

Interest income on investment securities >100 27,507 9,736

Interest income on advances to banks >100 1,180 494

Interest revenue on loans and advances to customers 6 28,041 26,483

Medium term advances/call loans (6) 21,619 23,117

Overdrafts >100 3,715 356

Home loans (3) 932 965

Instalment sales & finance leases (13) 1,776 2,044

Interest income 55 56,728 36,713

Interest expense 13 15,693 13,864

Term deposits (4) 8,618 8,987

Savings accounts 88 527 281

Current accounts >100 1,189 242

Call deposits 52 573 378

Inter-bank deposits 45 2,354 1,627

Borrowed funds 4 2,432 2,349

Net interest income 80 41,035 22,849

Net interest income by business unitChange

%

H1 2017

Nmillion

H1 2016

Nmillion

Personal & Business Banking 21 16,134 13,369

Corporate & Investment Banking >100 23,129 8,070

Wealth 26 1,772 1,410

Net interest income 80 41,035 22,849

Factors impacting net interest income

Favourable

• Increase in loan pricing in line with market realities especially in the

Personal and Business Banking segment contributed to growth in

interest income

• Interest income benefitted from continued loan growth.

Adverse

• Growth in term deposits acquired to make up for the sterilisation

of deposits increased interest expenses.

0

5,000

10,000

15,000

20,000

30,000

25,000

Nmillion

11,317

Profit after tax – H1 2016

(6,254)17,141

PBB profit after tax growth

CIB profit after tax growth

Wealth profit after tax growth

Profit after tax – H1 2017

24,112

1,908

Contribution to profit after tax

Net interest income Loans and advances

Net interest margin before impairment charges

Net interest margin after impairment charges

Investment securities

Placements

Net interest income and net interest marginCAGR (H1 2013 – H1 2017): 23%

Composition of interest revenue10

0H1 2013 H1 2014 H1 2015 H1 2016 H1 2017

100

%

10

30

20

40

50

70

60

80

90

83% 75% 72% 72%

16%

19% 25% 27%

1% 1%6% 3%

49%

48%

2%

10

0H1 2013 H1 2014 H1 2015 H1 2016 H1 2017

10,000

20,000

30,000

50,000

40,000

17,937 22,997 22,135 22,849 41,035

4.9%

4.2%

5.3%

2.9% 2.8%

4.8%

5.6%

4.5%

4.4%

7.2%

Nmillion

0

1

3

2

4

5

7

6

8

%

44 45Group results

in brief

Business

unit review

Balance sheet

analysis


information

Income statement

analysis

Capital

management

Other

information


Inco

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Breakdown of non-interest revenue Change

%

H1 2017

Nmillion

H1 2016

Nmillion

Net fee & commission revenue 2 27,893 27,406

Account transaction fees (62) 2,150 5,594

Card based commission 4 1,630 1,569

Brokerage and financial advisory fees 82 2,549 1,402

Asset management fees 22 15,774 12,977

Custody fees 46 1,019 698

Electronic banking (14) 511 597

Foreign currency service fees (28) 2,942 4,104

Documentation and administration fees >100 1,097 363

Other >100 221 102

Trading revenue 81 11,966 6,607

Foreign exchange >100 5,431 1,445

Fixed income >100 6,405 2,446

Interest rates (95) 129 2,719

Equity >100 1 (3)

Other revenue >100 430 205

Dividend income (59) 50 121

Gains on disposal of property and equipment >100 44 0

Other non-bank revenue 336 84

Total non-interest revenue 18 40,289 34,218

Non-interest revenue (NIR)

Factors impacting non-interest revenue

Favourable

• Growth in asset management fees benefitted from increased assets

under management and customer base within our wealth business.

• Improved foreign exchange liquidity with the introduction of IEFX

window.

Adverse

• Decline in account transaction fees on the back of CBN’s directive

to reduce commission on turnover and other transaction fees.

Non-interest revenue Net fees and commisions income

% of total income Trading revenue

Other revenue

Non-interest revenueCAGR (H1 2013 – H1 2017): 14%

Composition of non-interest revenue10

0H1 2013 H1 2014 H1 2015 H1 2016 H1 2017

15,000

10,000

5,000

20,000

25,000

30,000

35,000

45,000

40,000

24,068 27,517 26,346 34,218 40,289

57%

54% 54%

60%

50%

Nmillion

0

10

30

20

40

50

80

60

100

90

70

%

10

0H1 2013 H1 2014 H1 2015 H1 2016 H1 2017

100

%

10

30

20

40

50

70

60

80

90

62% 68% 71% 80%

37% 30% 27% 19%

1% 2% 2% 1%

69%

30%

1%

Non-interest revenue by business unit Change

%

H1 2017

Nmillion

H1 2016

Nmillion

Corporate & Investment Banking 36 17,197 12,649

Personal & Business Banking (19) 6,609 8,118

Wealth 23 16,483 13,451

Non-interest revenue 18 40,289 34,218

46 47Group results

in brief

Business

unit review

Balance sheet

analysis


information

Income statement

analysis

Capital

management

Other

information


Inco

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Movement in credit impairment chargesChange

%

H1 2017

Nmillion

H1 2016

Nmillion

Specific credit impairment charges >100 16,688 5,175

Provision for performing loans >(100) (1,796) 3,515

Total impairment charges 71 14,892 8,690

Recoveries >100 (939) (240)

Credit impairment charges 65 13,953 8,450

Credit impairments by products Specific impairment

raised and (released)

Nmillion

General impairment

raised and (released)

Nmillion

Recoveries

Nmillion

Total

Nmillion

Mortgage lending 52 36 (323) (235)

Instalmental sales and finance leases 708 234 (86) 857

Card 53 (18) (4) 30

Corporate lending 7,308 (1,777) 0 5,532

Other loans and advance 8,567 (272) (526) 7,769

Total impairment charges 16,688 (1,796) (939) 13,953

Credit impairment charges by business unitChange

%

H1 2017

Nmillion

H1 2016

Nmillion


Personal & Business Banking >100 8,421 3,362

Credit impairment charges 65 13,953 8,450

Factors impacting credit impairment charges

Adverse

• Increase in general and specific provisioning in line with realities of the

economic situation.

• High interest rate environment and slow economic activities impacted

borrower’s ability to repay.

Operating expenses Staff costsCost-to-income ratio Depreciation Other operating cost

Operating expenses and cost-to-income ratio

Breakdown of operating expenses

Composition of operating expenses

Change % H1 2017 Nmillion H1 2016 Nmillion

Staff costs (15) 16,492 14,378

Other operating expenses: (17) 21,710 18,557

Information technology (24) 2,504 2,017

Communication expenses (18) 621 528

Premises and maintenance (15) 2,187 1,895

Depreciation expense (10) 2,010 1,830

Amortisation of intangible assets >(100) 23 0

Deposit insurance premium (9) 1,244 1,142

AMCON expenses (9) 4,926 4,503

Other insurance premium (70) 512 301

Auditors renumeration (14) 172 151

Non-audit service fee (see (ii) below) >(100) 14 3

Professional fees (19) 1,072 899

Administration and membership fees >(100) 1,594 794

Training expenses (27) 363 285

Security expenses (16) 696 599

Travel and entertainment 6 637 678

Stationery and printing (87) 621 332

Marketing and advertising (10) 903 822

Pension administration expense 49 104 202

Loss on sale property and equipment 100 0 3

Penalties and fines >(100) 41 19

Donations >(100) 311 34

Operational losses >100 (21) 30

Directors fees 5 168 176

Provision for legal costs, levies and fines >100 (805) 915

Impairment of other financial assets >100 1,861 (44)

Indirect tax (VAT) >(100) 346 160

Others >100 (394) 283

Total operating expenses 16 38,202 32,935

Operating expenses

10

0

10,000

5,000

15,000

20,000

25,000

30,000

45,000

40,000

35,000

26,512 29,110 31,045 32,935 38,202

63.1%

57.7%64.0%

57.7%

47.0%

Nmillion

0

10

30

20

40

50

70

60

80

90

100

%

H1 2013 H1 2014 H1 2015 H1 2016 H1 2017

10

0H1 2013 H1 2014 H1 2015 H1 2016 H1 2017

100

%

10

30

20

40

50

70

60

80

90

44% 45% 43% 44% 43%

7% 6% 6% 6% 5%

49% 50% 51% 52%51%

Impairment charges and credit loss ratio

H1 2013 H1 2014 H1 2015 H1 2016 H1 2017(5,000)

0

5,000

10,000

20,000

15,000

Nmillion

0.5

4.5

6.5

8.5

2.5

(1.5)

%

0.8%

7.3%

3.7%

0.8%1.0%

5,175

3,515

16,688

(1,796)

5,525

2,374

1,883

(445)

1,875 493

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

48 49Group results

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Business

unit review

Balance sheet

analysis


information

Income statement

analysis

Capital

management

Other

information


Inco

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is

Operating expenses by business unitChange

%

H1 2017

Nmillion

H1 2016

Nmillion


Personal & Business Banking 16 19,501 16,754

Wealth 14 5,074 4,446

Operating expenses 14 38,202 32,935

Factors impacting operating expenses

Staff cost and headcount

• Staff salary increase as a result of inflation adjustment

Other operating expenses

• Increase in deposit insurance expenses as a result of growth

in deposits from customers.

• Increased contribution to AMCON sinking fund due to growth

in total assets and off balance sheet items.

• Growth in premises and maintenance related expenses as we

upgrade branches.

Taxation

Effective tax rate

Taxation charge and effective tax rate

Taxation

Breakdown of taxation Change

%

H1 2017

Nmillion

H1 2016

Nmillion

FY 2016

Nmillion

Direct taxation

Normal taxation 23 5,001 4,053 8,981

Deferred tax (82) 56 312 (292)

Total taxation 16 5,057 4,365 8,689

10

0

H1 2013 H1 2014 H1 2015 H1 2016 H1 2017

4,000

5,000

1,000

(1,000)

3,000

2,000

6,000

0

(5.0)

15.0

20.0

5.0

10.0

30.0

25.0

Nmillion %

(158) 3,762 2,909 4,365 5,057

(1.7%)

18.9%

22.2%

27.8%

17.3%

50 51Group results

in brief

Business

unit review

Balance sheet

analysis


information

Income statement

analysis

Capital

management

Other

information


Inco

me

stat

emen

t an

alys

isOperating expenses (continued)

0

400,000

200,000

600,000

800,000

1,000,000

1,400,000

1,200,000

Nmillion

1,273,960

367,956

111,880

327,621

302,056

28,938

23,095

Total assets Cash & loans to bank

Trading & derivative assets

Pledged assets

Financialinvestments

Loans & advances to customers

Otherassets

Intangible assets, property & equipment

112,302

10

0H1 2015 FY 2015 H1 2016 FY 2016 H1 2017

100

%

10

30

20

40

50

70

60

80

90

31 25 2426

710 9

3

134

40 38 32 29

11 17 22 24

5 3 5 8

2

4 3 3 2

30

33

34

24

4

0

3

10

0FY 2016

1,200

1,000

Nbillion

200

400

600

800

H1 2017

327.6

453.8

132.2

35.1

302.1

22.6

316.6

369.8

67.5 23.0

23.1

252.8

Balance sheet

Overview of group consolidated assets



Other assets


Financial investments

Financial investments Other assets

Pledged assets Trading & derivative assets

Trading, derivative & pledged assets


Cash & loans to banks Cash & loans to banks

Breakdown of total assetsAsset mix

52 53Group results

in brief

Business

unit review

Balance sheet

analysis


information

Income statement

analysis

Capital

management

Other

information


Bal

ance

sh

eet

anal

ysis

Title (continued)

Balance sheet

analysis

5355576264

Balance sheetLoans and advancesLoans and advances performanceDeposits and current accountsFunding and liquidity

Balance sheet analysis

0

2.0

1.0

3.0

4.0

5.0

6.0

%

1.9

2.0 2.02.2

2.9

4.3

2.5

3.0

3.8

5.1

H1 2015 FY 2015 H1 2016 FY 2016 H1 2017

Return on assets

The group’s total assets closed at N1.274 trillion in H1 2017 from N1.053 trillion in FY 2016. The growth in total assets is majorly from the 13%

growth in deposit from customers which funded 50% of total assets.

The group’s after tax return on average assets grew to 4.3% from 2.5% achieved in FY 2016, which is a reflection of an increase in profit after tax.

Pre-tax return on average assets

After tax return on average assets

Loans and advances

Gross loans and advancesCAGR (H1 2015-H1 2017): (2%)

Breakdown of loans and advances to customers

Composition of gross loans and advances

Change

%

H1 2017

Nmillion

FY 2016

Nmillion

H1 2016

Nmillion

Gross loans and advances 5 393,688 375,316 407,087

Home loans (6) 8,370 8,924 8,918

Instalmental sales and finance leases (9) 18,838 17,273 22,306

Overdrafts 5 49,781 47,471 41,289

Term loans 5 316,699 301,648 334,574

Provisions 15 (25,732) (22,351) (31,451)

Specific credit impairments (26) (14,226) (11,249) (20,712)

Portfolio credit impairments (4) (11,506) (11,102) (10,739)

Net loans and advances 4 367,956 352,965 375,636

10

0H1 2015 FY 2015 H1 2016 FY 2016 H1 2017

500

450

Nbillion

200

150

100

50

300

250

350

400

431.5 379.4 407.1 375.3 393.7

Mortgage 2%

Overdrafts 13%

Term loans 80%

Instalmental sales and finance leases 5%

54 55Group results

in brief

Business

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Balance sheet

analysis


information

Income statement

analysis

Capital

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Bal

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Balance sheet (continued)

Loans and advances by sector

Industry

Change

%

H1 2017

Nmillion

FY 2016

Nmillion

Agriculture (11) 26,092 29,424

Construction and real estate 16 44,024 38,066

Consumer credit (10) 47,471 52,511

Downstream Oil & Gas (16) 24,528 29,100

Electricity & other utilities 0 - -

Finance & Insurance (65) 561 1,606

General commerce 3 38,820 37,618

Government (12) 12,825 14,631

Manufacturing 31 132,123 101,241

Oil & gas services (22) 6,201 7,997

Transportation & communication (13) 30,164 34,640

Upstream Oil & Gas 8 30,879 28,481

Gross loans and advances 5 393,688 375,316

Loans and advances performance

Non-performing loans NPL/total loan

NPL/total loans Provision adequacy

Non-performing loans NPL and coverage ratio

0H1 2015 FY 2015 H1 2016 FY 2016 H1 2017

10.0

5.0

15.0

20.0

25.0

30.0

35.0

25.8 27.0 28.1 18.7 30.9

6.0%

7.1%

5.0%

Nbillion

0

1.0

3.0

2.0

4.0

5.0

7.0

6.0

8.0

9.0

%

6.9%

7.8%

10

6.0% 7.1% 6.9% 5.0% 7.8%

H1 2015 FY 2015 H1 2016 FY 2016 H1 2017

83.8%

95.9%

112.0%

83.3%

119.7%

0

20.0

40.0

60.0

80.0

100.0

120.0

%

Loans and advances

• Growth in loans and advances due to increased lending to manufacturing and general commerce sectors.

• We will continue to monitor our loan portfolio in line with economic realities.

Breakdown of loans and advances by industry

H1 2017

Agriculture 7%

Construction & real estate 11%

Consumer credit 12%

Downstream Oil & Gas 6%

Electricity & other utilities 0%

Finance & Insurance 0%

General commerce 10%

Government 3%

Manufacturing 33%

Oil & gas services 2%

Transportation & communication 8%

Upstream oil & gas 8%

Agriculture 8%


Consumer credit 14%


Electricity & other utilities 0%



Government 4%

Manufacturing 27%



Upstream oil & gas 8%

FY 2016

Breakdown of gross loans and advances by business unitPersonal &

Banking Business

Nmillion

Corporate &

Investment Banking

Nmillion

Total

Nmillion

Overdrafts 21,128 28,653 49,781

Term loans 92,176 224,523 316,699

Instalmental sales and finance leases 17,418 1,420 18,838

Home loans 8,370 - 8,370

Total loans and advances 139,092 254,597 393,688

Breakdown of non-performing loans and advances by business unit

Personal &

Banking Business

Nmillion

Corporate &

Investment Banking

Nmillion

Total

Nmillion

Overdrafts 3,191 - 3,191

Term loans 9,195 15,204 24,399

Instalment sales and finance leases 2,970 - 2,970

Home loans 325 - 325

Total non-performing loans and advances 15,681 15,204 30,885

56 57Group results

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Business

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Balance sheet

analysis


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Income statement

analysis

Capital

management

Other

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Loans and advances (continued)

• Increase in non-performing loans is largely on the back of some newly classified loans in oil and gas sector.

• NPLs to government are loans granted to cooperative societies of Government employees who have been affected by salary delays.

• Increase in NPLs in Upstream oil & gas due to classification of a client in the Oil & Gas sector whose operations had been disrupted by militancy action

resulting in closure of the Trans Forcados Pipeline.

• NPL coverage ratio for H1 2017 is 83.3% (FY 2016: 119.7%). Coverage ratio on performing loans for the period was 3.2%.

• Foreign currency loans accounted for 44% of NPLs, while local currency loans accounted for the balance.

Breakdown of non-performing loans and advances by industry

Change

%

H1 2017

Nmillion

FY 2016

Nmillion

Agriculture (68) 1,005 3,128

Construction and real estate 92 620 322

Consumer credit 10 4,759 4,313

Manufacturing 88 3,236 1,725

Upstream Oil & gas >100 13,456 -

Downstream Oil & Gas >100 2,247 359

Oil & gas services (69) 543 1,755

General commerce (28) 1,751 2,426

Transportation & communication (32) 3,092 4,528

Government 49 176 119

Total non-performing loans 65 30,885 18,675

Non-performing loans by sector

H1 2017

Agriculture 3%


Consumer credit 15%

Manufacturing 10%



General commerce 6%


Government 1%

Oil Upstream 44%


Agriculture 17%


Consumer credit 13%

Manufacturing 9%





Government 1%

Oil Upstream 0%


FY 2016

Non-performing loans by productChange % H1 2017 FY 2016

Overdrafts (24) 3,191 4,183

Term loans 95 24,399 12,537

Instalment sales and finance leases 75 2,970 1,697

Home loans 26 325 258

Total non-performing loans and advances 65 30,885 18,675

58 59Group results

in brief

Business

unit review

Balance sheet

analysis


information

Income statement

analysis

Capital

management

Other

information


Bal

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Loans and advances performance (continued)

June 2017 Performing loans Non-performing loans

Neither past due nor specifically

impaired

Not specifically

impaired

Specifically impaired loans

Non-performing loans

Note

Total Loans

and advances

to customers

Nmillion

Balance sheet

impairments

for performing

loans

Nmillion

Normal

monitoring

Nmillion

Close

monitoring

Nmillion

Early arrears

Nmillion

Sub-standard

Nmillion

Doubtful

Nmillion

Loss

Nmillion

Total

Nmillion

Securities

and expected

recoveries on

specifically

impaired loans

Nmillion

Net after

securities

and expected

recoveries on

specifically

impaired loans

Nmillion

Balance sheet

impairments

for non-

performing

specifically

impaired loans

Nmillion

Gross

specific

impairment

coverage

%

Total non-

performing

loans

Nmillion

Non-

performing

loans

%

Personal & Business Banking 139,092 3,492 94,968 11,355 17,087 5,932 5,293 4,456 15,681 6,536 9,145 9,145 58 15,681 11.3

Mortgage loans 8,370 89 4,220 1,599 2,294 136 149 39 324 120 204 204 63 324 3.9

Instalment sale and finance leases 14,148 495 6,167 2,387 2,623 1,097 1,385 489 2,971 1,484 1,487 1,487 50 2,971 21.0

Card debtors 1,471 30 926 - 276 61 66 142 269 21 248 248 92 269 18.3

Other loans and advances 115,103 2,878 83,655 7,369 11,894 4,638 3,693 3,786 12,117 4,911 7,206 7,206 59 12,117 10.5

Corporate & Investment Banking 254,596 8,015 204,358 24,651 7,711 1,748 13,456 - 15,204 10,123 5,081 5,081 33 15,204 6.0

Corporate loans 254,596 8,015 204,358 24,651 7,711 1,748 13,456 - 15,204 10,123 5,081 5,081 33 15,204 6.0

Gross loans and advances 393,688 11,507 299,326 36,006 24,798 7,680 18,749 4,456 30,885 16,659 14,226 14,226 46 30,885 7.8

Asset quality (Prudential guidelines)

60 61Group results

in brief

Business

unit review

Balance sheet

analysis


information

Income statement

analysis

Capital

management

Other

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Loans and advances performance (continued)

Deposit and current accounts

Deposit liabilities

Deposit liabilitiesCAGR (2015-2017): 1%

Deposit mix

Breakdown of total depositsChange

%

H1 2017

Nmillion

H1 2016

Nmillion

FY 2016

Nmillion


Deposits under repurchase agreements - - 14,689 -

Other deposits from banks (10) 48,619 86,086 53,766


Current accounts 20 337,064 223,488 281,523

Call deposits 19 50,447 30,925 42,303

Savings accounts 12 43,167 34,532 38,630

Term deposits 6 202,073 254,381 191,535

Negotiable certificate of deposit (100) - 50,317 6,978


Current accounts Call deposits

Term depositsSavings accounts

Negotiable certificate of deposit

10

0H1 2015 FY 2015 H1 2016 FY 2016 H1 2017

200.0

300.0

100.0

400.0

500.0

700.0

600.0

41

50

57 55 57

Nbillion

601.7 493.5 593.6 561.0 632.8

0H1 2015 FY 2015 H1 2016 H12017

100

%

10

30

20

40

50

70

60

80

90

44% 39% 34%

10%

1% 0%0%

4%6%

7%

8%

8%

8%

44% 38%

FY 2016

43%

8%

6%5%

38% 50%

32%

7%

8%

53%

Deposit breakdown by business unit

Change

%

H1 2017

Nmillion

H1 2016

Nmillion

FY 2016

Nmillion

Personal & Business Banking 9 385,349 289,020 353,189


Savings deposits 12 43,167 34,532 38,630

Call deposits (56) 4,250 2,935 9,687

Term deposits - 116,521 107,703 115,996

Corporate & Investment Banking 19 247,402 304,623 207,780


Call deposits 42 46,197 27,990 32,616

Term deposits 4 85,552 196,995 82,517


Deposit liabilities

• Increase in deposits by 13% year-to-date, as number of customer continues to grow taking advantage of our expanded delivery channels.

• Customer acquisition initiatives continue to yield positive results as current accounts and savings accounts grow by 17% and 12% respectively.

• Cost of funds impacted negatively by the growth in term deposits.

62 63Group results

in brief

Business

unit review

Balance sheet

analysis


information

Income statement

analysis

Capital

management

Other

information


Bal

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LiabilitiesAssets

328

454

132

35

302

23

633

49

251

161

60

119

Balance sheet funding

Funding mix

H1 2017

Equity 13%

Deposits from customers 50%

Deposits from banks 4%

Trading liabilities 3%

Other liabilities 21%

Borrowings 9%

Equity 13%

Deposits from customers 53%

Deposits from banks 5%

Trading liabilities 1%

Other liabilities 16%

Borrowings 12%

Equity

Other liabilities

Other borrowings

Deposits from banks

Deposits from customers

Trading & derivative liabilities

Property, Equipment and instangible assets

Other assets

Financial investments

Loans & advnaces to customers

Trading, derivatives and pledged assets

Cash and loans to banks

FY 2016

Assets Liabilities

Liquidity market overview Framework and governance

The nature of banking and trading activities results in a continuous

exposure to liquidity risk. Liquidity problems can have an adverse impact

on a group’s earnings and capital and, in extreme circumstances, may

even lead to the collapse of a group which is otherwise solvent.

The group’s liquidity risk management framework is designed

to measure and manage the liquidity position at various levels of

consolidation such that payment obligations can be met at all times,

under both normal and considerably stressed conditions. Under the

delegated authority of the board of directors, the Asset and Liability

Committee (ALCO) sets liquidity risk policies in accordance with regulatory

requirements, international best practice and SBG stated risk appetite.

Tolerance limits, appetite thresholds and monitoring items are

prudently set and reflect the group’s conservative appetite for liquidity

risk. ALCO is charged with ensuring ongoing compliance with liquidity risk

standards and policies. The group must, at all times, comply with the more

stringent of Standard Bank imposed tolerance limits or regulatory limits.

Liquidity and funding management

A sound and robust liquidity process is required to measure, monitor and

manage liquidity exposures. The group has incorporated the following

liquidity principles as part of a cohesive liquidity management process:

• Structural liquidity mismatch management;

• Long-term funding ratio;

• Maintaining minimum levels of liquid and marketable assets;

• Depositor restrictions;

• Local currency loan to deposit ratio;

• Foreign currency loan to deposit ratio;

• Interbank reliance limit;

• Intra-day liquidity management;

• Collateral management;

• Daily cash flow management;

• Liquidity stress and scenario testing; and

• Funding plans;

• Liquidity contingency planning.

The cumulative impact of the above principle is monitored, at least

monthly by ALCO and the process is underpinned by a system of

controls. The latter includes the application of purpose-built technology,

documented processes and procedures, independent oversight and

regular independent reviews and evaluations of the effectiveness of

the system.

Liquidity ratio computationGroup Bank

H1 2017

Nmillion

FY 2016

Nmillion

H1 2017

Nmillion

FY 2016

Nmillion

Specified liquid assets

Cash 16,857 14,430 16,857 14,430

Balance with CBN (net DR/CR balance, and excluding CRR) 41,275 11,566 37,973 11,566

Net balance held with banks within Nigeria 3,861 12,047 9 9

Treasury Bills 339,528 245,049 322,910 222,475

Net Money At Call with Other Banks - - - 0

Federal Government of Nigeria bonds 310 2,996 (2,239) 374

Stabilisation Securities - - - 0

Total Asset (A) 401,831 286,088 375,510 248,855

Current liabilities

Adjusted deposit liabilities 400,856 413,316 415,532 421,402

Net Money at call held for other Banks - - - -

Total liabilities (B) 400,856 413,316 415,532 421,402

Liquidity ratio A/B*100 100.2% 69.2% 90.4% 59.1%


64 65Group results

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analysis


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Other

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Group unencumbered surplus liquidityChange

%

H1 2017

Nmillion

FY 2016

Nmillion

Marketable assets 39.0 350,045 251,875

Short-term foreign currency placements - -

Total unencumbered marketable assets 39.0 350,045 251,875

Other readily accessible liquidity >100 206,104 12,500

Total unencumbered surplus liquidity >100 556,149 264,375

Structural liquidity mismatch management

The mismatch approach measures the group’s liquidity by assessing the

mismatch between its inflow and outflow of funds within different time

bands on a maturity ladder. The structural liquidity mismatch is based on

behaviourally-adjusted cash flows which factors a probability of maturity

into the various time bands. As expected cash flows vary significantly

from the contractual position, behavioural profiling is applied to assets,

liabilities and off-balance sheet items with an indeterminable maturity or

drawdown period.

A net mismatch figure is obtained by subtracting liabilities and net

off-balance sheet positions from assets in each time band. The group’s

liquidity position is assessed by means of the net cumulative mismatch

position while its liquidity mismatch performance is an aggregation of

the net liquidity position in each successive time band expressed as a

percentage of total funding related liabilities to the public.

Maintaining minimum levels of liquid and marketable assets

Minimum levels of prudential liquid assets are held in accordance with

all prudential requirements as specified by the regulatory authorities.

The group needs to hold additional unencumbered marketable assets,

in excess of any minimum prudential liquid asset requirement, to cater

for volatile depositor withdrawals, draw-downs under committed

facilities, collateral calls, etc.

The following criteria apply to readily marketable securities:

• Prices must be quoted by a range of counterparties;

• The asset class must be regularly traded;

• The asset may be sold or repurchased in a liquid market, for payment

in cash; and settlement must be according to a prescribed, rather than

a negotiated, timetable.

Funding and liquidity (continued)

The group ensures that the banking entity (Stanbic IBTC Bank PLC) is within the regulatory liquidity ratio of 30% on a daily basis.

The minimum, average and maximum liquidity ratios presented in the table above are derived from daily liquidity ratio computations.

Liquidity ratio Jan-Jun 2017 Jan-Dec 2016

Minimum 59.30% 56.24%

Average 86.68% 78.05%

Maximum 122.41% 101.95%

Depositor concentration

To ensure that the group does not place undue reliance on any single

entity as a funding source, restrictions are imposed on the short dated

(0-3 months term) deposits accepted from any entity. These include:

• The sum of 0-3 month deposits and standby facilities provided by

any single deposit counterparty must not, at any time, exceed 10%

of total funding related liabilities to the public; and

• The aggregate of 0-3 month deposits and standby facilities from the

10 largest single deposit counterparties must not, at any time, exceed

20% of total funding related liabilities to the public.

Concentration risk limits are used to ensure that funding diversification is

maintained across products, sectors, and counterparties. Primary sources

of funding are in the form of deposits across a spectrum of retail and

wholesale clients. As mitigants, the group maintains marketable securities

in excess of regulatory requirements in order to condone occasional

breaches of concentration limits.

Loan to deposit limit

A limit is put in place, restricting the local currency loan to deposit ratio

to a maximum specified level, which is reviewed periodically. Similarly, in

order to restrict the extent of foreign currency lending from the foreign

currency deposit base, a foreign currency loan to deposit limit, which

is also referred to as own resource lending, is observed. As mitigants,

the group maintains high levels of unencumbered marketable and liquid

assets in excess of regulatory benchmark.

Intra-day liquidity management

The group manages its exposures in respect of payment and settlement

systems. Counterparties may view the failure to settle payments when

expected as a sign of financial weakness and in turn delay payments

to the group. This can also disrupt the functioning of payment and

settlement systems. At a minimum, the following operational elements

are included in the group’s intra-day liquidity management:

• Capacity to measure expected daily gross liquidity inflows and

outflows, including anticipated timing where possible;

• Capacity to monitor its intraday liquidity positions, including available

credit and collateral;

• Sufficient intraday funding to meet its objectives;

• Ability to manage and mobilise collateral as required;

• Robust capacity to manage the timing of its intraday outflows; and

• Readiness to deal with unexpected disruptions to its intraday liquidity

flows.

Daily cash flow management

The group generates a daily report to monitor significant cash flows.

Maturities and withdrawals are forecast at least 3-months in advance

and management is alerted to large outflows. The report, which is made

available to the funding team, ALM and market risk also summarises

material daily new deposit as well as the interbank and top depositor

reliance (by value and product).

The daily cash flow management report forms an integral part of the

ongoing liquidity management process and is a crucial tool to proactively

anticipate and plan for large cash outflows.

Interbank reliance

Interbank funding traditionally is seen as the most volatile and least

stable source of funding, easily influenced by market sentiment and

prone to flight under stress situations. Consequently, to ensure prudent

liquidity management is enforced, the group restricts the local currency

interbank funding as a proportion of the local currency funding base to a

maximum of 15% of the total currency funding base.

Liquidity stress testing and scenario testing

Anticipated on- and off-balance sheet cash flows are subjected to a

variety of the group specific and systemic stress scenarios in order to

evaluate the impact of unlikely but plausible events on liquidity positions.

Scenarios are based on both historical events, such as past emerging

markets crises, past local financial markets crisis and hypothetical events,

such as an entity specific crisis. The results obtained from stress testing

provide meaningful input when defining target liquidity risk positions.

67Group results

in brief

Business

unit review

Balance sheet

analysis


information

Income statement

analysis

Capital

management

Other


Bal

ance

sh

eet

anal

ysis

Capital

management

6970

Return on ordinary equityRisk weighted assets

Capital management

69Group results

in brief

Business

unit review

Balance sheet

analysis


information

Income statement

analysis

Capital

management

Other

information

Return on ordinary equity

Breakdown of return on average equity by business unit

Average equity

H1 2017

Nmillion

Pre tax ROaE

H1 2017

%

Post tax ROaE

H1 2017

%

Average equity

FY 2016

Nmillion

Pre tax ROaE

FY 2016

%

Post tax ROaE

FY 2016

%

Personal & Business Banking 43,487 (24.0) (24.3) 28,580 (5.9) (5.6)

Corporate & Investment Banking 73,744 57.9 55.9 59,911 27.9 24.9

Wealth 31,068 85.6 57.9 41,989 52.8 36.2

Stanbic IBTC Group 148,299 38.2 31.3 130,481 28.5 18.9

Shareholders’ equity grew by 16% to close at N159.5 billion in H1 2017 from N137.1 billion achieved in FY 2016. The return on average equity

improved to 31.3% from 18.9% achieved in FY 2016. The improvement in return on equity is as a result of a 113% growth in profit after tax.

Shareholders’ fund (average)

ROaE

Shareholders’ equity Average shareholders’ fund and return on equity10

0

180

160

140

Nbillion

40

20

80

60

100

120

118.8 123.7 130.7 137.1 159.5

H1 2015 FY 2015 H1 2016 FY 2016 H1 2017

10

0

20,000

40,000

60,000

80,000

100,000

160,000

120,000

140,000

Nmillion

0

15.0

5.0

35.0

30.0

25.0

10.0

20.0

%

H1 2015 FY 2015 H1 2016 FY 2016 H1 2017

117,392 119,874 127,198 130,414 148,299

18.9%

31.3%

15.0%12.9%13.8%

71Group results

in brief

Business

unit review

Balance sheet

analysis


information

Income statement

analysis

Capital

management

Other


Cap

ital

m

anag

emen

t Risk – weighted assets

Tier I capital adequacy

Total capital adequacy

Statutory minimum

Total assets and risk weighted assets Capital adequacy ratio

H1 2015 FY 2015 H1 2016 FY 2016 H1 2017

Total assets 1,033,430 937,564 1,174,543 1,053,523 1,273,960

Risk weighted assets

667,177 646,343 528,098 695,439 784,198

% of risk weighted assets to total assets

64.6% 68.9% 45.0% 66.0% 61.6%

The group maintained adequate capital to support its business in H1 2017 and are well above the regulatory requirement.

The group’s total capital adequacy ratio closed the period at 22.9% (Bank 20.2%), while the tier 1 capital adequacy ratio stood at 19.2% (Bank 16.1%).

These ratios are well above the 10% minimum statutory requirement.

Capital adequacy computationBasel II Basel II

Group

H1 2017

Nmillion

Bank

H1 2017

Nmillion

Group

FY 2016

Nmillion

Bank

FY 2016

Nmillion

Tier I capital 150,421 112,533 129,480 99,144

Tier II capital 28,827 28,070 28,906 28,099

Total qualifying capital 179,248 140,603 158,386 127,243

Credit risk 561,681 534,642 486,430 458,266

Operational risk 207,092 146,986 207,092 146,986

Market risk 15,425 15,425 1,917 1,917

Risk weighted assets 784,198 697,053 695,439 607,169

Capital adequacy

Tier I 19.2% 16.1% 18.6% 16.3%

Tier II 3.7% 4.0% 4.2% 4.6%

Total 22.9% 20.2% 22.8% 21.0%

10

0

200,000

400,000

600,000

800,000

1,400,000

1,200,000

1,000,000

Nmillion

0

60.0

20.0

80.0

70.0

50.0

40.0

10.0

30.0

%

10

0

5.0

15.0

10.0

20.0

25.0

%

16.1

21.3

17.4

10.6

13.9

20.6

18.6

22.8

19.2

22.9

H1 2015 FY 2015 H1 2016 FY 2016 H1 2017


information

727273

Market capitalisation and price-to-book ratioDividend payment historyEquity and range analysis

Market & shareholder information

The shareholding pattern of the Group as at 30 June 2017

Share range No of share-holders % share-holders No of holding % holding

1 - 1,000 38,926 40.88 20,965,307 0.21

1001 - 5,000 36,586 38.43 75,756,982 0.76

5,001 - 10,000 9,518 10.00 59,217,256 0.59

10,001 - 50,000 7,907 8.30 149,241,302 1.49

50,001 - 100,000 1,159 1.22 73,349,795 0.73

100,001 - 500,000 834 0.88 155,686,481 1.56

500,001 - 1,000,000 122 0.13 76,874,551 0.77

1,000,001 - 5,000,000 82 0.09 177,538,068 1.78

5,000,001 - 10,000,000 14 0.01 98,882,505 0.99

10,000,001 - 50,000,000 39 0.04 861,637,326 8.62

50,000,001 - 100,000,000 13 0.01 867,574,042 8.68

100,000,001 - 10,000,000,000 11 0.01 7,383,276,385 73.83

Grand Total 95,211 100 10,000,000,000 100

Significant shareholding of 5% and above

Shareholder

No of

shares held

30 June 2017

Percentage

shareholding

30 June 2017

No of

shares held

31 Dec 2016

Percentage

shareholding

31 Dec 2016

Stanbic Africa Holdings Ltd 5,318,957,354 53.2 5,318,957,354 53.2

First Century International 747,089,076 7.5 747,089,076 7.5

72 73Group results

in brief

Business

unit review

Balance sheet

analysis


information

Income statement

analysis

Capital

management

Other

information


Mar

ket

& s

har

ehol

der

info

rmat

ion

Net asset value per share

Price-to-book

Market capitalisation Net asset value per share and price-to-book

Market capitalisation and price-to-book ratio

10

0

350

300

Nbillion

50

150

100

200

250

270.0 165.3 162.0 150.0 330.0

H1 2015 FY 2015 H1 2016 FY 2016 H1 20170

H1 2015 FY 2015 H1 2016 FY 2016 H1 2017

400

200

600

800

1,000

1,400

1,800

1,200

1,600

kobo

0

0.5

1.5

1.0

2.0

2.5

Times

1,188 1,237 1,307 1,371 1,595

2.3

1.31.2

1.1

2.1

Change % H1 2017 FY 2016

Number of shares at the end of the period thousands 0 10,000,000 10,000,000

Net asset value Nmillion 16 159,496 137,102

Net asset value per share kobo 16 1,595 1,371

Share price at the end of the period kobo >100 3,300 1,500

Market capitalisation at end of the period Nbillion >100 330.0 150.0

Price-to-book at end of the period times >100 2.1 1.1

Stanbic’s share price outperformed both the Banking Index (BI) and The NSE ASI. Stanbic’s share price appreciated by over 100%, while the BI and

NSE ASI appreciated by 45.1% and 23.2% respectively. The group’s market capitalisation also grew to N330.0 billion in H1 2017, and ranked 6th most

capitalised stock amongst the 173 listed equities on the Nigerian Stock Exchange in H1 2017.

Dividend payment history

Period ended

Total amount paid

Nmillion

Dividend paid per share

Kobo

December 31 2015

Interim: 9,000 90

Final 500 5

December 31 2014

Interim: 11,000 110

Final: 1,500 15

December 31 2013

Interim: 7,000 70

Final: 1,000 10

December 31 2012

Final: 1,000 10

Equity and range analysis

Other

information

7576

Financial and other definitionsContact details

Other information

75Group results

in brief

Business

unit review

Balance sheet

analysis


information

Income statement

analysis

Capital

management

Other

information

Financial and other definitions

After tax return on average equity (ROaE) (%) Profit after tax as a percentage of annual average ordinary shareholders’ funds.

Basic earnings per ordinary share (EPS) (kobo) Earnings attributable to ordinary shareholders divided by the ordinary shares in issue.

CAGR (%) Compound annual growth rate.

Cost-to-income ratio (%) Operating expenses as a percentage of total income.

Credit loss ratio (%) Total impairment charges on loans and advances per the income statement as a percentage of gross

loans and advances.

Dividend cover (times) Earnings per share divided by dividend per share.

Dividend per share (kobo) Total dividends to ordinary shareholders including dividends and scrip distributions declared per

share in respect of the period.

Gross impairment coverage (%) Non-performing loan impairments as a percentage of gross non-performing loans.

Net asset value (Nmillion) Equity attributable to ordinary shareholders.

Net asset value per share (kobo) Net asset value divided by the number of ordinary shares in issue at the end of the period.

Net interest margin (%) Net interest income as a percentage of average of total assets less derivative assets.

Non-interest revenue to total income (%) Non-interest revenue as a percentage of total income.

Non-performing loans ratio (%) Total non-performing loans as a percentage of gross loans and advances.

Price-to-book ratio (times) Market capitalisation divided by net asset value.

Profit attributable to ordinary shareholders Profit for the period attributable to ordinary shareholders, calculated as profit for the period less

minority interests.

Profit for the period (Nmillion) Income statement profit attributable to ordinary shareholders and minorities shareholders for the period.

Provisions for non-performing loans (Nmillion). Provisions for specific identified credit losses.

Provision of performing loans (Nmillion) Provisions for incurred credit losses inherent in the performing loan book.

Shares in issue (number) Number of ordinary shares in issue as listed on the floor of the Nigerian Stock Exchange (NSE).

Total capital adequacy ratio (%) Regulatory capital divided by risk-weighted assets.

Turnover in shares traded (%) Number of shares traded during the period as a percentage of the weighted average number of shares.

Weighted average number of share (number) The weighted average number of ordinary shares in issue during the period as recorded on the NSE.

76 Stanbic IBTC Analysis of financial results for the 6 months ended 30 June 2017

Oth

er

info

rmat

ion Contact details

77Group results

in brief

Business

unit review

Balance sheet

analysis


information

Income statement

analysis

Capital

management

Other

information

Idris Toriola

Head, investor relations T: +234 1 4228501

E: [email protected]

Registered address

IBTC Place

Walter Carrington Crescent

P.O. Box 71707

Victoria Island, Lagos

Nigeria


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Stanbic IBTC Holdings PLC.

On receipt of this document, you agree to be bound and are deemed

to understand that:

This presentation is provided to you for information purposes only

on the understanding that such information is strictly confidential. This

presentation must not be delivered or its contents disclosed to anyone

other than the entity (including its employees) to which it is provided and

must not be used or reproduced, in whole or part, for any purpose other

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This presentation is intended to be a commercial communication

and is not to be construed as a recommendation or the constitution or

solicitation of an offer for the sale and purchase of any financial product,

service, investment or security. The information, investments and/

or strategies discussed in this presentation may not be suitable for all

investors and where you have any concerns you should approach an

investment advisor.

We do not accept liability for any loss (direct or consequential) arising

from use of this presentation. You must not rely on any communication

Victor Yeboah-Manu

Chief financial officer

T: +234 1 4228746


Chidi Okezie

Company secretary

T: +234 1 4228695


(written or oral) from us as investment advice, a recommendation to enter

into a transaction (which includes the information and explanations related

to the terms and conditions of a transaction) or deem 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

and past performance is not indicative of future results. While we have

taken care in preparing this presentation, we give no representation,

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Our duties and responsibilities do not include tax advisory, legal,

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You must procure and rely on independent assessments and investigations

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