STANBIC commenced
merchant banking in 1989 as Investment Banking and Trust Company Limited and
became a universal bank in 2002. It was
converted to a public company in 2005 and its shares were listed on the Nigerian
Stock Exchange (NSE) in the same year. Thereafter, IBTC Chartered Bank Plc
emerged from the amalgamation of Investment Banking and Trust Company Limited,
Chartered Bank Plc and Regent Bank Plc.Its merger with Stanbic Bank Nigeria
Limited gave rise to Stanbic IBTC Bank Plc.
STANBIC is a
full-fledged financial services group that provides services such as banking,
pension management, asset management, stockbroking, insurance brokerage, and
trusteeship. The business is divided into three segments which are personal and
business banking, corporate and investment banking and wealth.Foreign
shareholding in the company is 54.5%.Standard Bank Group through Stanbic Africa
Holdings Limited holds 53.2% of its shareholding while First Century
International Limited controls 7.5% equity stake of the company.
Stanbic IBTC Bank Plc and Stanbic IBTC Pension
Managers Limited are the main drivers of the group. The management's effort to
aggressively penetrate the retail end of the market through its personal and
business segment is laudable. This segment serves individuals and SMEs and is a
lucrative part of the market; it is responsible for a sizable portion of net
interest income. It produces, on the average, half of the net interest income,
which is the bank's core income.
However, penetrating this segment of the market has been at a high cost.
In other words, STANBIC has been
finding it difficult to make profit in this part of the market. In addition, it
has led to the creation of more risk assets and reduced quality of the company's
loan portfolio.
Loan
portfolio has been grown cautiously. This may not be unconnected with the
sluggish economy. Though deposit expansion has not been rapid, STANBIC has been attracting cheaper
deposits. Customer deposits have been improving by 10.5% in the past three
years. This means that for STANBIC to
take advantage of the opportunities in the market it may have to borrow and the
debt obligations, coupled with untoward exchange rate movement, would weaken its
net earnings.
The
group benefits from the goodwill of its non-banking subsidiaries such as
Stanbic IBTC Pension Managers Limited to propel its profits. Profit After Tax
(PAT) has grown by 19.6% in the past seven years. A share of STANBIC is expected to produce a return
of 13.2% in three year's time.
STANBIC is not illiquid
and its long-term solvency is not questionable.
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