Stanbic Holdings FY’2016 results: Profit after tax declined by 9.9% to Ksh.4.4 billion
Stanbic Holdings released FY’2016 results posting a 9.9 percent decline in core earnings per share to Ksh.11.2 from Ksh.12.4 in FY’2015 driven by a 30.1 percent growth in operating expenses to Ksh.12.5 billion from Ksh.9.6 billion, which outpaced operating income that grew by 9.3 percent to Ksh.18.5 billion from Ksh.16.9 billion.
Key highlights for the performance from FY’2015 to FY’2016 include:
- Total operating revenue grew by 9.3 percent to Ksh.18.5 billion from Ksh.16.9 billion, driven by a 16.7 percent growth in Net Interest Income and a 0.2 percent growth in Non Funded Income
- Net Interest Income grew by 16.7 percent to Ksh.10.9 billion from Ksh.9.3 billion, resulting into a Net Interest Margin of 5.8 percent from 5.5 percent in FY’2015
- Non-funded income (NFI) remained flat at Ksh.7.7 billion from Ksh.7.6 billion in FY’2015, a marginal growth of 0.2 percent. The current revenue mix stands at 59:41 Funded to Non-Funded Income from 55:45 in FY’2015
- Operating expenses grew by 30.1 percent to Ksh.12.5 billion from Ksh.9.6 billion driven by a 93.1 percent growth in credit impairment charges to Ksh.1.8 billion from Ksh.0.9 billion in FY’2015; excluding the impairment charges, operating expenses grew by 23.4 percent to Ksh.10.7 billion from Ksh.8.7 billion in FY’2015
- Cost to income ratio deteriorated to 67.3 percent from 56.6 percent in FY’2015 and excluding LLP, cost to income ratio stood at 57.9 percent from 51.2 percent in FY’2015
- Profit after tax declined by 9.9 percent to Ksh.4.4 billion from Ksh.4.9 billion in FY’2015
- Loans and advances grew by 3.4 percent to Ksh.132.6 billion from Ksh.128.2 billion while customer deposits grew by 1.4 percent to Ksh.155.8 billion from Ksh.153.7 billion leading to an increase in the loan to deposit ratio to 85.1 percent from 83.4 percent
Stanbic earnings were below expectations especially given that it recorded a decline in profitability in FY’2015. Compared to Barclays Bank, which has also released FY’2016 results, both the deposit gathering and loan disbursement were poor, with loan and deposit growing at 3.4 percent and 1.4 percent respectively.
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