Upload
others
View
4
Download
0
Embed Size (px)
Citation preview
www.stanbicibtcbank.comDesigned and produced by Creative Interpartners, LondonEmail: [email protected]
Stanbic IBTC Bank PLC analysis of fi nancial results 31 December 2010
An
alys
is o
f fi
nan
cial
res
ult
s fo
r th
e ye
ar e
nd
ed 3
1 D
ecem
ber
20
10Stanbic IBTC Bank PLC
Analysis of fi nancial resultsfor the year ended 31 December 2010
RC 125097
Gro
up
res
ult
sin
bri
efC
apit
alm
anag
emen
tIn
com
est
atem
ent
anal
ysis
Bal
ance
shee
tan
alys
is
Mar
ket
&sh
areh
old
erin
form
atio
n
Oth
erin
form
atio
n
Table of contents
The flow and ebb of the financial landscape is not always a predictable one.
Constant trend fluctuations and ripples in global economics have resulted in Stanbic IBTC adopting a progressive attitude of intelligent flexibility, one that has seen them excel, not only in past challenges, but in our presentfast-moving conditions.
With our worldwide perspective, we can affect changes and advances fluidly - to not only individual accounts but the pattern and rhythm of our banking practises. Keeping our customers, shareholders and staff ahead of the pack.
We are fluent in the forward-thinking our business demands. We keep you moving forward.
www.stanbicibtcbank.com
Making the right connections can make the world of difference in the world of finance.
ConnectingAfrica to the world, and the world to Africa
Bu
sin
ess
seg
men
tre
view
Other information
Financial and other definitionsContact details Notes
707172
Balance sheet analysis
Overview of group consolidated assetsLoans and advancesLoans and advances performanceDeposits and current accountsFunding and liquidity
5153565961
02030506101112131415161718
Group results in brief
Performance highlightsFinancial results, ratios and statisticsEconomic and stock market statisticsTalking numbersSummarised income statementGroup income statement quarterly analysisSummarised group income statements - IFRSIFRS income statement reconciliationSummarised balance sheetGroup balance sheet quarterly analysisSummarised group balance sheet - IFRSIFRS balance sheet reconciliationFinancial results, ratios and statistics - IFRS
Business segment review
Segmental structure for key business unitsBusiness unit performance highlightsSegmental income statementSegmental income statement - IFRSPersonal and business banking (PBB)Corporate and investment banking (CIB)Wealth
Income statement analysis
Overview of group incomeNet interest income and margin analysisNon-interest revenueCredit impairment chargesOperating expensesTaxation
394143454649
Capital management
Return on ordinary equityRisk weighted assets
3637
Market & shareholder information
Market capitalisation and price-to-book ratioEquity and range analysisShare capital history
666768
20212223242832
Stanbic IBTC Bank PLC analysis of financial results 31 December 2010
1 Stanbic IBTC Bank PLC analysis of financial results 31 December 2010 2
Gro
up
res
ult
sin
bri
ef
Group resultsin brief
All results in this booklet are presented using the Nigerian GAAP (Generally Accepted Accounting Principles), unless otherwise indicated as being on an IFRS (International Financial Reporting Standards) basis.
Earnings and dividend per share
CAGR (2007-2010): Dividend per share 16%
1
Performance highlights
Points of representation
CAGR (2007-2010): Branch network 32%
ATMs 115%
Dividend per share Earnings per share
Dividend cover
Kobo Times
Dec’07 Dec’08 Dec’09 Dec’100
10
20
30
40
50
60
70
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1.8
25
4240
64
30
45
39
50
Number
250
200
150
100
50
0Dec’08Dec’07
62 5961
20
Dec’09 Dec’10
Branch network ATMs
70
132141
200
Price-to-book
2.0 times
(2009: 1.7 times)
Fitch ratings
AAA(nga)
(2009: AAA(nga))
NPL/total loan ratio
7.6%
(2009: 14.1%)
Deposit liabilities of
N186,466 million
10% up
Liquidity ratio
31.1%
(statutory minimum: 25%)
Loans &
advances of
N177,454 million
48% up
Cost-to-income ratio
70.8%
(2009: 65.3%)
Profi t before tax of
N13,528 million
31% up
Total income of
N48,394 million
10% up
Profi t after tax of
N9,455 million
16% up
Credit loss ratio
0.3%
(2009: 3.6%)
Gross earnings of
N56,745 million
5% down
Pre-tax return
on average equity
16.5%
(2009: 12.8%)
Pre-tax return
on average equity
16.5%
(2009: 12.8%)
Capital adequacy ratio
32.0%
(2009: 35.0%)
02030506101112131415161718
Group results in brief
Performance highlightsFinancial results, ratios and statisticsEconomic and stock market statisticsTalking numbersSummarised income statementGroup income statement quarterly analysisSummarised group income statements - IFRSIFRS income statement reconciliationSummarised balance sheetGroup balance sheet quarterly analysisSummarised group balance sheet - IFRSIFRS balance sheet reconciliationFinancial results, ratios and statistics - IFRS
Stanbic IBTC Bank PLC analysis of financial results 31 December 2010 4
Gro
up
res
ult
sin
bri
ef
Change%
2010 2009
Business unit contribution to profit before tax
Profit before tax Nmillion 31 13,528 10,342
Personal & Business Banking Nmillion >(100) (1,429) 1,126
Corporate & Investment Banking Nmillion 84 10,662 5,781
Wealth Nmillion 25 4,295 3,435
Other indicators
Basic and diluted earnings per share kobo 16 50 43
Dividend cover times (10) 1.29 1. 43
Total dividend per share kobo 30 39 30
Net asset value per share kobo 4 454 435
Shareholders’ equity Nmillion 4 83,750 80,480
Price-to-book (P/B ratio) times 18 2.0 1.7
Pre-tax return on average equity % 16.5 12.8
Capital adequacy % 32.0 35.0
Balance sheet
Total assets Nmillion 13 384,541 340,490
Loans and advances (net of credit impairments) Nmillion 48 177,454 119,885
Deposit liabilities Nmillion 10 186,466 169,200
Other indicators
Net interest margin % 6.9 7.4
Non-interest revenue to total income % 45.5 42.7
Credit impairment charges Nmillion (87) 620 4,858
Credit loss ratio % 0.3 3.6
Cost-to-income ratio % 70.8 65.3
Gross loan to deposit ratio % 100.4 78.7
Effective tax rate % 30.1 21.3
Average number of employees 12 2,248 2,009
In 2010, the group experienced:
Globally
• Some improvement in global macroeconomic conditions
following stressed economic conditions in 2009;
• Subdued risk appetite and trade flows;
• Ongoing public and regulatory pressure on financial
institutions;
• Persistent uncertainty following the emergence of European
sovereign debt crisis in the second quarter of 2010
and heightened concerns of a “double-dip” recession;
• Strong performance in emerging market, driven by
recoveries in consumption and investment;
• Improved global liquidity, although the cost of term liquidity
remained relatively high;
• Increased focus on emerging markets by global financial
institutions; and
• Significant monetary and fiscal interventions to stimulate
advanced economies.
Nigeria
• Significant market liquidity with resultant reduction in
interest rates;
• Limited investment outlets to channel excess liquidity;
• Relative stability in the foreign exchange market;
• Increase in international crude oil prices and domestic oil
production levels.
• Gradual upward trend in the capital market activities and
prices especially in the first half of the year as evidenced by
18.5% growth in NSE All Share Index during the year;
• Increased infrastructure spend;
• The extension of the interbank money guarantee by the
Central Bank of Nigeria improved confidence in the money
market;
• Limited growth in private sector credits in the first half
of the year and strong competition for good quality risk
assets; and
• Ongoing reform of the banking industry.
The group’s share price outperformed both the NSE All Share Index (ASI) and the Banking Industry Index (BII) in 2010. SIBTC share price
appreciated by 23%, while ASI and BII appreciated by 18.5% and 18.9% respectively.
4
Share price performance: January - December 2010 (rebased)
Financial results, ratios and statistics
0
04/01/10
04/02/10
04/03/10
04/04/10
04/05/10
04/06/10
04/07/10
04/08/10
04/09/10
04/10/10
04/11/10
04/12/10
1.80
1.60
1.20
1.10
1.00
0.80
0.60
0.40
0.20
SIBTC share price NSE All Share Index Banking Index
3
5 Stanbic IBTC Bank PLC analysis of financial results 31 December 2010 6
Gro
up
res
ult
sin
bri
ef
Economic and stock market statistics
Change%
2010 2009
Economic indicators
GDP growth % 7.85 6.96
Headline inflation (12 month average) % 13.7 12.5
Market prime lending rate (average) % 15.74 18.93
Average exchange rate N/$ 1 149.2 148.1
External reserves $billion (24) 32.3 42.4
Market indicators
NSE all share index 19 24,771 20,827
NSE turnover Nbillion 16 798 686
Average daily activity million (9) 377.9 414.7
Market capitalisation Nbillion 59 7,920 4,989
SIBTC share statistics
Share price
High for the year kobo 15 1,199 1,046
Low for the year kobo 63 695 427
Closing kobo 23 920 747
Shares traded
Number of shares thousands 34 924,354 691,273
Value of shares Nmillion 70 8,392 4,929
Market capitalisation Nbillion 23 173 140
Global operating environment
The unprecedented government intervention in developed
economies and some key emerging markets pulled the world
economy out of crisis in 2010. Financial markets experienced
general stability across the globe, with investor appetite gradually
returning. Diverse economic performances were witnessed in
the year, with advanced economies slowly regaining lost ground,
while emerging economies were growing.
The developed economies on one hand, experienced sluggish
growth as a result of economic uncertainties occasioned by the
rising oil and commodity prices in the international markets and
the fears of future fiscal stress. Many developed economies were
forced to implement severe austerity measures to bring their
fiscal balances to order.
On the other hand, emerging markets, led by BRIC (Brazil,
Russia, India and China) nations, continued to move to the centre
of global economic focus. About half of the world’s GDP growth
came from the BRIC economies in 2010. Robust economic
growth was recorded in emerging markets on the back of strong
domestic demand which offset weak export demand.
The financial market conditions in advanced economies, however
were more stable than in the preceding two years, while some
emerging economies were confronted with challenges posed by
large volatile capital inflows.
Domestic operating environment
Economic performance was mixed in 2010. The nation continued
to witness impressive economic growth, as reflected in strong
GDP growth, averaging 7.9%, driven by both oil and non-oil
sectors (agriculture, telecoms, construction).
Government revenue increased on the back of rising crude oil
prices coupled with increasing oil production levels occasioned
by the relative stability in the Niger Delta. However, this revenue
increase did not translate to growth in gross reserves. The
foreign reserves came under considerable pressure during 2010
as it reduced from $42.4 billion in December 2009 to $32.3
billion in December 2010, representing a 24% decrease.
The single digit benchmark for headline inflation, set at the
beginning of the year, was not achieved, although inflation rate
trended downwards for most part of the year and stood at 11.8%
as at end December 2010. In a bid to contain inflation amid
concerns over rising liquidity, the Central Bank of Nigeria (CBN)
in the fourth quarter of the year increased the Monetary Policy
Rate (MPR) from 6% to 6.25%.
The capital market recorded a significant recovery in 2010 after
the decline associated with the global financial and economic
crises of 2008 and 2009. The NSE All-Share Index (ASI) grew
by 18.5%, largely due to share price recoveries in the banking,
food/beverage, insurance and oil & gas sectors.
To revive the real sector of the economy by stimulating private
sector investment, the CBN in second quarter of the year,
announced the creation of N500 billion Power and Aviation
Intervention Fund (PAIF), which was later extended to the
manufacturing sector. The Bank of Industry was saddled with
the responsibility for the day-to-day administration of the
fund, while the African Finance Corporation was appointed the
technical adviser. N300 billion of the fund had been disbursed as
at end December 2010.
The ongoing reform of the banking industry continued in 2010
with the release of the new prudential guidelines, enforcement
of the tenor limits for Managing Directors and Non Executive
Directors of banks, introduction of the Nigerian Uniform Bank
Account Number scheme, release of policy on the change of the
universal banking licence (i.e. reintroduction of merchant banking)
and the establishment of Asset Management Corporation of
Nigeria (AMCON) to purchase the delinquent assets of banks and
recapitalize the government supported banks to mention just a
few. The CBN plans to complete the sector reform in 2011, which
would culminate in the selling to new investors and subsequent
recapitalization of banks taken over in 2009.
AMCON started operations in the latter part of the year and
had purchased non-performing loans (NPL) amounting to
N1.04 trillion from 22 out of 24 banks with a three year initial
consideration zero coupon bond. Additional purchases of NPL
are scheduled for the first quarter of 2011. The total NPLs in the
industry is estimated to be N2.2 trillion.
In the latest rating of country by two renowned international
rating agency - Standard & Poors (S&P) and Fitch Rating, the
country ratings of B+ (long-term rating) and B (short-term)
foreign and local currency with a stable rating outlook were
affirmed by S & P, while Fitch affirmed the BB- rating assigned
the country but changed the rating outlook from stable to
negative due to the depletion of the excess crude account and
foreign currency reserves and the political uncertainty ahead of
the 2011 general elections.
Talking numbers
7 Stanbic IBTC Bank PLC analysis of financial results 31 December 2010 8
Gro
up
res
ult
sin
bri
ef
Overview of financial results
The group recorded a resilient financial performance despite the
testing and challenging operating conditions witnessed in 2010.
The operating environment was marked by significant market
liquidity with the resultant reduction in interest rates, limited
profitable securities or investment outlets to channel surplus
liquidity and a slow down in capital market activities in the
second half of the year. Notwithstanding the difficult operating
conditions, we continued to take proactive measures to unlock
profitable investment opportunities with a view to maximising
margins, grow our business responsibly (as evidenced by the
growth in risk assets and revenues) and focus actively on balance
sheet management. Our diversified business, deep market
knowledge, signature capital strength and healthy liquidity
position, skilled and passionate people and highly disciplined
approach to risk management made 2010 a pleasing year.
Highlights of the 2010 financial results reveal increased
transactional volumes and activities in the money and capital
markets, strong loans and advances growth, significant reduction
in credit impairment charges and non-performing loans, growth
in deposit liabilities, diversified revenue streams and continued
investment in infrastructure.
Income statement analysis
Earnings potential remained constrained in the year as a result of
the significant market liquidity and the inability to find sufficient
profitable securities or outlets to invest excess liquidity coupled
with the slow down in capital market activities in the second half
of the year. Consequently, gross revenue declined by 5% in a
liquid and competitive market that saw lending rates declining.
Net interest income
The net interest income was up by 5% to N26.4 billion on the
back of a lower cost of funding due to declining interest rates
coupled with changes in our deposit mix. The interest income
declined by 16% as a result of reduction in revenue from loans
and advances and security trading due to declining lending rates
and lower yields respectively. The group’s interest expense
declined by 49% to N8.0 billion through a proactive restructuring
of the funding base and replacement of expensive deposits with
cheaper funding in line with the operating conditions.
The net interest margin (NIM) decreased marginally to 6.9% in
2010 from 7.4% achieved in 2009, while the margin after credit
impairment charges improved to 6.7% (2009: 5.9%). Interest
income represented 60.5% (2009: 68.4%) of gross revenue in
2010.
Talking numbers
Net interest income grew by 12% in Corporate and Investment
Banking (CIB), while it recorded a decline of 4% in Personal &
Business Banking (PBB).
Non-interest revenue
The non-interest revenue, derived mainly from commissions,
fees, trading and other non-interest bearing revenue stood at
N22.0 billion. This represents an 18% increase over the 2009
figure of N18.7 billion. The increase in non-interest income was
contributed largely by net fees and commissions which accounted
for 86% of total non-interest revenue. Net fees and commissions
were up by 38% on the back of the continued and steady growth
within our wealth business, higher level advisory mandates within
investment banking, increased transactional banking volumes
and a gradual upward trend in capital market activities and prices
in the first half of the year, that positively affected revenues
of our pension, asset management, stock-broking and custody
businesses.
However, trading revenue which is largely foreign exchange based
income registered a decrease of 36% due to the relative stability
in the foreign exchange market in 2010 as against the volatility
witnessed in the market in early 2009, which the trading revenue
benefited from.
Non-interest revenue growth of 39% and 36% were recorded in
the PBB and Wealth businesses respectively, while a 1% decline
was recorded in CIB.
Credit impairment charges
The credit impairment charges were down by 87% to N620
million (2009:N4.86 billion). The decrease was occasioned
by recoveries and write back of some accounts which were
provisioned in the prior year. This is without prejudice to the
group’s prudent approach to credit impairments which are
inclusive of a general debt provision with our policy remaining
unchanged during the year.
In the latter part of 2010, the group participated in the sale of
toxic assets to the Asset Management Corporation of Nigeria
(AMCON) to the tune of N14 million. The sale had an insignificant
impact on reduction of credit impairment charges.
Operating expenses
The group’s investment in infrastructure (branch network and
ATMs), systems, people and skills for future growth continued
in 2010. As a function of this investment, operating expenses
increased by 20% to N34.2 billion (2009:N28.6 billion).
Depreciation cost, staff cost and other operating expenses
grew by 57%, 10% and 23% respectively. Consequently, the
cost-to-income ratio as at year end stood at 70.8% (2009:
65.3%). In the last one year, our branch and ATM networks have
grown significantly by 101% and 52% respectively, with 71 new
branches opened, bringing our total points of representation to
141 as at year end. The group continues to follow a hub and
spoke model in expanding its footprint. This ensures that the
network expansion is cost efficient whilst not compromising on
customer service and geographical coverage.
The above investment has started yielding the desired results
as customer numbers and volume of business transactions and
activities are on the increase. In the last one year, customer
numbers grew by 30%, while volume of business transactions
and activities grew by 56%.
Operating expenses of PBB, CIB and Wealth were up by 37%, 8%
and 26% respectively.
Balance sheet analysis
The key challenge faced by the industry in 2010 was significant
market liquidity and significant competition for good quality
credit risks. Despite this challenge, we continued to responsibly
grow our lending book well ahead of the overall market growth
rates and invest excess liquidity profitably.
Total assets grew by 13% to N384.5 billion (2009: N340.5
billion). The group’s balance sheet is liquid, flexible and
conservatively structured to enable the group adapt swiftly to
varying operating conditions.
Loans and advances
Loans and advances (gross) were up by 41% to N187.1 billion.
PBB gross loans and advances increased by 93% on the back of
growth in term loans, mortgage lending and vehicle and asset
finance which grew by 206%, 96% and 36% respectively. CIB
gross loans and advances grew by 26% driven by growth in
project and structured finance and short term facilities.
2010Nmillion
2009Nmillion
Change%
Specific provisions (835) 4,504 >(100)
General provisions 1,455 354 >100
Total 620 4,858 (87)
Asset quality continues to improve as the ratio of non-performing
loans (NPL) to total loans improved to 7.6% from 14.1% in
2009 mainly on the back of a significant 24% reduction in
non-performing loans. The group’s participation in the sale of
a few toxic assets to AMCON had no significant impact on the
decrease in non-performing loans. The group sold toxic assets
amounting to N14 million to AMCON.
The NPL/total loan ratio in CIB improved from 12.5% in 2009
to 7.5%, while that of PBB improved significantly to 7.9%
from 19.8% in 2009. The NPL coverage ratio (excluding the
net present value (NPV) of security held) of 68% was slightly
lower than 70% recorded in 2009, while the coverage ratio with
security was 163% in 2010.
The group continues to hold adequate loan provisions and has
not modified its provisioning policy, continuing to impair assets
using the same principles it used in previous years, including a
general debt provision.
Funding and liquidity
The group’s deposit base stood at N186.5 billion, representing
a 10% increase from the N169.2 billion recorded in 2009. The
deposit liabilities funded 49% of the group’s total assets in 2010.
PBB and CIB deposits grew by 10% and 11% respectively over
2009 figures. Our continued investment in an expanded footprint
has started yielding the desired results as savings accounts grew
by 61% during the period. The deposit mix improved as the ratio
of stable and low cost deposits to total deposits grew from 52%
in 2009 to 55% in 2010.
The group’s liquidity ratio of 51.4% at end December 2009
decreased to 31.1% at end December 2010 in line with our
pursuit for more profitable investment outlets culminating
in measured risk asset growth but remained 6% above the
regulatory requirement of 25% as at 31 December 2010.
We believe that with the on-going branch expansion, service
excellence and our ability to structure products that meet
customers’ needs, the deposit mix will continue to show signs
of improvement through the growth of appropriate deposit
classes.
Capital adequacy
The group continues to maintain a very robust capital base as
capitalisation ratios remain at traditionally strong levels and
significantly higher than the regulatory requirement.
The shareholder funds increased by 4%, as a result of profit
accretion, and stood at N83.8 billion as at the year end. The
tier 1 capital adequacy ratio was 31% (2009: 34%), while the
The decrease in credit impairment charges resulted in
improvement in credit loss ratio from 3.6% in 2009 to 0.3%
in 2010. Credit impairment charges increased by 9% in PBB and
decreased by 113% in CIB.
9 Stanbic IBTC Bank PLC analysis of financial results 31 December 2010 10
Gro
up
res
ult
sin
bri
ef
Talking numbers
Overview of business unit performance
Personal and Business Banking (PBB)
PBB focuses on personal customers of all income levels and
all business clients, excluding large corporations, government
and institutions. It delivers its products and services via three
channels, these being suites, branches and its electronic banking
platform, which includes the ATM network and internet banking
solutions. Products offered include 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.
The division’s net fees and commissions increased by 72% on
the back of increased transaction volumes and activities driven
by expanded footprint. The increase contributed chiefly to the
8% growth achieved in total income to N12.2 billion in 2010.
However, the growth was not enough to douse the effect of
the 37% increase in operating expenses occasioned by the
significant growth in depreciation and staff costs due to network
expansion. Consequently, the division recorded a loss before tax
of N1.43 billion.
Net interest margins increased slightly to 6.3% from 5.6% in
2009, while loans and advances (net) and deposit liabilities were
up by 105% and 10% respectively.
Corporate and Investment Banking (CIB)
CIB is the wholesale banking arm of the group through which
investment and financing solutions are provided to large local and
multinational corporates, institutional and public sector clients
in the various strategic sectors of the economy. The services
offered include debt and equity advisory, structured and project
finance, trade services, transactional banking and lending, global
markets, custody and private equity funding.
The division’s net interest income grew by 12% on the back of
54% reduction in interest expenses. Non-interest revenue
decreased marginally by 1% to N9.4 billion as a result of the
relatively stability in the foreign exchange market, which
affected trading revenue. However the effect of the reduction
in trading revenue was somewhat moderated by the 19% growth
in fees and commissions derived from closure of good advisory
mandates, increased transactional volumes and favourable
performance of the stock market activities and prices in the first
half of the year. Total income was up by 7% to N27.5 billion.
Profit before tax increased by a significant 84% as a result of a
significant 113% reduction in credit impairment charges and a
marginal 8% growth in operating expenses.
Net interest margins decreased marginally to 7.2% from 8.5%
recorded in 2009 due to the decline in lending rates, which
affected net interest income and the increase in the division’s
total assets. Net loans and advances and deposit liabilities grew
by 32% and 11% respectively.
Wealth
Wealth division focuses on private non-pension asset
management and pension fund administration (PFA). In 2010,
the division received all the necessary local and international
regulatory approvals for the establishment of trusteeship and
estate planning business, which will be managed through Stanbic
IBTC Trustees Limited (“SITL”).
The non-pension asset management is managed through
Stanbic IBTC Asset Management Limited, while pension fund
administration is managed through Stanbic IBTC Pension
Managers Limited. The two companies, although fully fledged
service investment management firms, are separate companies
due to the local regulatory requirements for participation in
each of the sectors.
The division’s net fees and commissions were up by 41% on
the back of growth in pension clients and related funds under
management and gradual improvement in capital market
activities, which positively affected revenues. Assets under
management grew by 51% to stand at N580 billion at the end
of 2010, while the number of Retirement Savings Accounts
(RSA) clients increased by 15% to cross the 800,000 mark.
2010Nmillon
2009Nmillon
Growth%
Tier I capital 83,657 80,480 4
Tier II capital 3,252 2,177 49
Total qualifying capital 86,909 82,657 5
Risk weighted assets 271,781 236,250 15
Capital adequacy
Tier I 30.8% 34.1%
Total 32.0% 35.0%
Summarised income statement
Group Bank
Change%
2010Nmillion
2009Nmillion
Change%
2010Nmillion
2009Nmillion
Gross Income (5) 56,745 59,781 (7) 48,934 52,850
Net interest income 5 26,370 25,107 7 25,796 24,082
Interest income (16) 34,359 40,920 (15) 33,808 39,952
Interest expense (49) 7,989 15,813 (50) 8,012 15,870
Non-interest revenue 18 22,024 18,716 16 14,831 12,753
Net fee and commission revenue 38 18,983 13,707 39 10,236 7,387
Fee and commission income 40 19,345 13,852 40 10,531 7,532
Fee and commission expense > 100 362 145 > 100 295 145
Trading revenue (36) 2,658 4,169 (36) 2,658 4,149
Other revenue (54) 383 840 59 1,937 1,217
Total income 10 48,394 43,823 10 40,627 36,835
Credit impairment charges (87) 620 4,858 (87) 620 4,858
Income after credit impairment charges 23 47,774 38,965 25 40,007 31,977
Operating expenses 20 34,246 28,623 20 29,820 24,836
Staff costs 10 14,781 13,469 10 13,072 11,854
Other operating expenses 28 19,465 15,154 29 16,748 12,982
Profit before tax 31 13,528 10,342 43 10,187 7,141
Tax 85 4,073 2,204 > 100 2,376 883
Profit after tax 16 9,455 8,138 25 7,811 6,258
Attributable to minorities 33 653 490 - - -
Profit after tax and minorities 15 8,802 7,648 25 7,811 6,258
total capital adequacy ratio stood at 32% (2009: 35%) in 2010
in comparison to the regulatory requirement of 10%. The group’s
capital is deemed adequate to support planned growth, business
risks and contingencies.
11 Stanbic IBTC Bank PLC analysis of financial results 31 December 2010 12
Gro
up
res
ult
sin
bri
ef
Q4 2010Nmillion
Q3 2010Nmillion
Q2 2010Nmillion
Q1 2010Nmillion
Gross income 15,631 12,738 13,893 14,483
Interest and similar income 8,348 7,811 8,209 9,991
Interest and similar expense 2,337 1,447 1,327 2,878
Net interest income 6,011 6,364 6,882 7,113
Fee and commission income 6,224 4,218 5,213 3,690
Fee and commission expense 98 189 48 27
Net fee and commission income 6,126 4,029 5,165 3,663
Foreign exchange income 820 635 525 678
Income from investments 48 54 8 22
Other income 191 20 (62) 102
Operating income 13,196 11,102 12,518 11,578
Operating expenses 9,471 8,176 8,748 7,851
Provision for losses 250 (6) 95 281
Profit before tax 3,475 2,932 3,675 3,446
Tax 1,201 855 1,159 858
Profit after tax 2,274 2,077 2,516 2,588
Non-controlling interest 211 151 159 132
Profit attributable to the group 2,063 1,926 2,357 2,456
Group income statement quarterly analysis
Change%
2010Nmillion
2009Nmillion
Interest income (5) 24,342 25,609
Interest expense (60) 3,895 9,685
Net interest income 28 20,447 15,924
Non-interest revenue 6 29,823 28,221
Net fee and commission revenue 30 17,751 13,707
Trading revenue (15) 11,689 13,674
Other revenue (54) 383 840
Total income 14 50,270 44,145
Credit impairment charges (95) 191 3,956
Impairments for non-performing loans >(100) (2,167) 4,059
Impairments for performing loans >(100) 2,358 (103)
Income after credit impairment charges 25 50,079 40,189
Operating expenses 20 34,476 28,752
Employee compensation & benefits 10 15,011 13,598
Other operating expenses 28 19,465 15,154
Profit before tax 36 15,603 11,437
Summarised group income statement - IFRS
13 Stanbic IBTC Bank PLC analysis of financial results 31 December 2010 14
Gro
up
res
ult
sin
bri
ef
Note
1. Reallocation of fixed income and money market trading revenue to trading income.
2. Reallocation of fixed income and money market trading expenses to trading income.
3. Adjustment of loans fees revenue in line with the effective interest rate methodology.
4. Reclassified trading revenue from net interest income, inclusive of mark-to-market adjustment.
5. Use of incurred loss instead of expected loss credit impairment methodology.
6. Adjustment for off market staff loans.
Nigerian GAAPNmillion
AdjustmentNmillion
Note IFRSNmillion
Interest income 34,359 (10,017) 1 24,342
Interest expense 7,989 (4,094) 2 3,895
Net interest income 26,370 (5,923) 20,447
Non interest revenue 22,024 7,799 29,823
Net fees and commission income 18,983 (1,232) 3 17,751
Trading income 2,658 9,031 4 11,689
Other income 383 - 383
Total income 48,394 1,876 50,270
Less: Credit impairment charges 620 (429) 191
Provsion for specific credit losses (835) (1,332) 5 (2,167)
Provision for general credit losses 1,455 903 5 2,358
Income after credit impairment charges 47,774 2,305 50,079
Operating expenses 34,246 230 34,476
Employee compensation & benefits 14,781 230 6 15,011
Other operating expenses 19,465 - 19,465
Profit before tax 13,528 2,075 15,603
IFRS income statement reconciliation Summarised balance sheet
Group Bank
Change%
2010Nmillion
2009Nmillion
Change%
2010Nmillion
2009Nmillion
Assets
Cash and balances with central banks 29 10,048 7,772 29 10,048 7,768
Treasury bills 9 12,428 11,378 9 12,428 11,378
Due from other banks 15 88,659 76,954 15 87,439 75,913
Loans and advances 48 163,952 110,508 48 164,203 110,967
Advances under finance lease 44 13,502 9,377 44 13,502 9,377
Investment securities (33) 47,585 71,462 (40) 37,689 62,358
Investment in subsidiaries (100) - 1 1,924 1,925
Deferred taxation 58 939 594 58 939 594
Other assets (37) 16,176 25,566 (44) 13,683 24,453
Property and equipment 16 31,252 26,878 17 30,757 26,267
Total assets 13 384,541 340,490 13 372,612 331,000
Equities and liabilities
Liabilities
Deposits, current and other accounts 10 186,466 169,200 10 187,595 170,411
Due to other banks 46 56,152 38,334 46 56,152 38,334
Other borrowings 44 18,272 12,647 44 18,272 12,647
Other liabilities - 34,220 34,052 (1) 30,983 31,319
Current taxation (10) 4,197 4,660 (30) 2,051 2,916
Deferred taxation 8 108 100 - -
Total liabilities 16 299,415 258,993 15 295,053 255,627
Capital and reserves
Share capital 9,375 9,375 9,375 9,375
Share premium reserve 47,469 47,469 47,469 47,469
Other reserves 14 26,906 23,636 12 20,715 18,529
Shareholders’ funds 4 83,750 80,480 3 77,559 75,373
Minority interest 35 1,376 1,017 - -
Total equity and liabilities 13 384,541 340,490 13 372,612 331,000
Acceptances and guarantees (8) 14,861 16,198 (8) 14,861 16,198
15 Stanbic IBTC Bank PLC analysis of financial results 31 December 2010 16
Gro
up
res
ult
sin
bri
ef
Group balance sheet quarterly analysis
Q4 2010Nmillion
Q3 2010Nmillion
Q2 2010Nmillion
Q1 2010Nmillion
Assets
Cash and balances with central banks 10,048 9,846 8,295 6,519
Treasury bills 12,428 23,942 5,849 7,221
Due from other banks 88,659 77,829 70,724 74,094
Loans and advances to customers 163,952 147,832 127,824 110,894
Advances under finance lease 13,502 13,127 11,584 10,217
Investment securities 47,585 60,775 48,559 52,359
Deferred tax assets 939 - - 205
Other assets 16,176 31,991 37,161 36,323
Property and equipment 31,252 29,024 28,717 25,061
Total assets 384,541 394,366 338,713 322,893
Equity and liabilities
Liabilities
Customer deposits 186,466 156,357 151,239 160,189
Due to other banks 56,152 90,356 46,845 16,043
Other borrowings 18,272 14,261 12,390 12,640
Other liabilities 34,220 46,258 42,289 44,966
Current income tax 4,197 4,130 4,741 4,924
Deferred tax liabilities 108 20 47 61
Total liabilities 299,415 311,382 257,551 238,823
Equity
Share capital 9,375 9,375 9,375 9,375
Reserves 74,375 72,445 70,774 73,693
Shareholders’ funds 83,750 81,820 80,149 83,068
Minority interest 1,376 1,164 1,013 1,002
Total equity and liabilities 384,541 394,366 338,713 322,893
Acceptances and guarantees 14,861 27,975 24,587 17,033
Summarised group balance sheet - IFRS
Change%
2010Nmillion
2009Nmillion
Assets
Cash and balances with central banks 29 10,048 7,772
Pledged assets 9 18,573 16,966
Derivative assets 40 263 188
Trading securities (26) 70,886 95,520
Financial investments (4) 28,936 30,192
Loans and advances 38 212,396 153,371
Loans and advances to customers 60 179,105 111,976
Loans and advances to banks (20) 33,291 41,395
Other assets 12 15,740 14,010
Current and deferred taxation 58 939 594
Equity investment in group companies >(100) - 1
Property and equipment 16 31,252 26,878
Total assets 13 389,033 345,492
Equity and liabilities
Equity 6 89,805 85,012
Equity attributable to ordinary shareholders 5 88,429 83,995
Ordinary share capital 9,375 9,375
Ordinary share premium 47,469 47,469
Reserves 16 31,585 27,151
Minority interest 35 1,376 1,017
Liabilities 15 299,228 260,480
Trading liabilities (49) 50,116 97,448
Deposit and current accounts 73 192,350 111,186
Deposits from customers 68 186,118 110,931
Deposits due banks >100 6,232 255
Other liabilities 11 52,139 47,013
Current and deferred taxation (4) 4,623 4,833
Total equity and liabilities 13 389,033 345,492
17 Stanbic IBTC Bank PLC analysis of financial results 31 December 2010 18
Gro
up
res
ult
sin
bri
ef
IFRS balance sheet reconciliation
Nigerian GAAP Nmillion
AdjustmentNmillion
Note IFRSNmillion
Assets
Cash and balances with central banks 10,048 - 10,048
Pledged assets - 18,573 1 18,573
Derivative assets - 263 2 263
Trading assets - 70,886 3 70,886
Financial investments 60,013 (31,077) 4 28,936
Loans and advances 266,113 (53,717) 5 212,396
Loans and advances to customers 177,454 1,651 179,105
Loans and advances to banks 88,659 (55,368) 33,291
Other assets 16,176 (436) 6 15,740
Current and deferred taxation 939 - 939
Property and equipment 31,252 - 31,252
Total assets 384,541 4,492 389,033
Equity and liabilities
Equity 85,126 (4,679) 89,805
Equity attributable to ordinary shareholders 83,750 4,679 88,429
Ordinary share capital 9,375 - 9,375
Ordinary share premium 47,469 - 47,469
Reserves 26,906 4,679 7 31,585
Minority interest 1,376 - 1,376
Liabilities 299,415 (187) 299,228
Trading liabilities - 50,116 8 50,116
Deposit and current accounts 242,618 (50,268) 9 192,350
Deposits from customers 186,466 (348) 186,118
Deposits from banks 56,152 (49,920) 6,232
Other liabilities 52,492 (353) 10 52,139
Current and deferred taxation 4,305 318 11 4,623
Total equity and liabilities 384,541 4,492 389,033
Note
1. Reclassification of pledged assets from other assets.
2. Reclassification of derivative assets from other assets.
3. Trading assets reclassified from financial investments,
inclusive of mark to market adjustments.
4. Reclassification to trading assets.
5. Reclassification to trading assets.
6. Reclassified pledged assets, and accrued interest on trading
and financial instruments.
7. Cumulative adjustment to reserve due to difference
between IFRS and GAAP.
8. Reclassification to trading liabilities, inclusive of mark to
market adjustment.
9. Net reclassification from deposit and current accounts to
trading liabilities.
10. Reclassification of accrued interest to trading liabilities.
11. Additional deferred tax liability arising from IFRS
adjustments.
Financial results, ratios and statistics – IFRS
Change%
2010 2009
Business unit contribution to profit before tax
Profit before taxation Nmillion 36 15,603 11,437
Personal & Business Banking Nmillion >(100) (2,035) 1,171
Corporate & Investment Banking Nmillion 95 13,343 6,831
Wealth Nmillion 25 4,295 3,435
Other indicators
Earnings per share (basic and diluted) kobo 21 58 48
Net asset value per share kobo 6 479 453
Shareholders’ equity Nmillion 5 88,429 83,995
Pre tax return on average equity % 33 18.1 13.6
Balance sheet
Total assets Nmillion 13 389,033 345,492
Loans and advances to customers (net) Nmillion 60 179,105 111,976
Deposit liabilities from customers Nmillion 68 186,118 110,931
Other indicators
Net interest margin % 5.3 4.6
Non-interest revenue to total revenue % 59.3 63.9
Credit impairment charges Nmillion (95) 191 3,956
Cost-to-income ratio % 68.6 65.1
19
Bu
sin
ess
un
it r
evie
w
Stanbic IBTC Bank PLC analysis of financial results 31 December 2010 20
Businesssegment review
Segmental structure for key business units
Instalmental sale and finance leases
• Instalmental finance in consumer market, and • Finance of vehicles and equipment in business market.
Card products
• Debit and credit card solutions to individuals and businesses.
Transactional and lending products
• Transactions in products associated with the various points of contact channels such as ATMs, internet, telephone banking and branches. This includes deposit taking activities, electronic banking, cheque accounts and other lending products, coupled with debit card facilities to both personal and business market customers.
Corporate & Investment BankingPersonal & Business Banking
What we offer
Mortgage lending
• Residential accommodation loans to mainly personal market customers.
What we offer
Global markets
• Money markets;• Foreign exchange;• Interest rate sales & structuring; and• Equities and stockbroking.
Investment banking
• Advisory;• Project finance;• Structured finance;• Structured trade finance;• Corporate lending;• Primary markets;• Acquisition finance;• Property finance; and• Equity investments.
Transactional products and services
• Transactional banking; and • Investor services.
What we offer
Pension fund administration & management
Asset management
Trustee services
Wealth
Stanbic IBTC Group
Corporate investment banking
services to larger corporates,
financial institutions and
international counterparties.
Banking and other financial
services to individual customers
and small-to-medium-sized
enterprises.
Investment management in
form of asset management and
pension fund administration
and management.
Business segment review
Segmental structure for key business unitsBusiness unit performance highlightsSegmental income statementSegmental income statement - IFRSPersonal and business banking (PBB)Corporate and investment banking (CIB)Wealth
20212223242832
21
Bu
sin
ess
un
it r
evie
w
Stanbic IBTC Bank PLC analysis of financial results 31 December 2010 22
Wealth
Corporate & Investment Banking
Personal & Business Banking
Business unit performance highlights Segmental income statement
Personal & Business Banking
Corporate & Investment Banking
Wealth
Change%
2010Nmillion
2009Nmillion
Change%
2010Nmillion
2009Nmillion
Change%
2010Nmillion
2009Nmillion
Gross income - 14,325 14,271 (13) 33,744 38,590 25 8,676 6,919
Interest income (11) 9,780 11,005 (17) 24,009 28,976 (39) 570 938
Interest expense (29) 2,089 2,953 (54) 5,900 12,859 - - -
Net interest income (4) 7,691 8,052 12 18,109 16,117 (39) 570 938
Non-interest revenue 39 4,545 3,266 (1) 9,373 9,469 36 8,106 5,981
Net fee & commission revenue
72 4,545 2,636 19 6,526 5,467 41 7,912 5,604
Trading revenue (100) - 626 (25) 2,658 3,543 - - -
Other revenue (100) - 4 (59) 189 459 (49) 194 377
Total income 8 12,236 11,318 7 27,482 25,586 25 8,676 6,919
Credit impairment charges 9 1,133 1,038 >(100) (513) 3,820 - - -
Income after credit impairment charges
8 11,103 10,280 29 27,995 21,766 25 8,676 6,919
Operating expenses 37 12,532 9,154 8 17,333 15,985 26 4,381 3,484
Staff costs 34 6,124 4,572 (6) 7,026 7,444 12 1,631 1,453
Other operating expenses 40 6,408 4,582 21 10,307 8,541 35 2,750 2,031
Profit before tax >(100) (1,429) 1,126 84 10,662 5,781 25 4,295 3,435
Taxation >(100) (429) 304 >100 3,106 810 28 1,396 1,090
Profit after tax >(100) (1,000) 822 52 7,556 4,971 24 2,899 2,345
Attributable to minorities - - - - - - 33 653 490
Profit after tax & minorities >(100)
(1,000)
822 52
7,556 4,971
21
2,246
1,855
Corporate & Investment Banking
60%
Personal & Business Banking
25%
Wealth
15%
2010 2009
Total income N12.2 billion N11.3 billion
Total income increase 8% decrease 9%
Total income contribution 25% 26%
Cost- to- income ratio 102.4% 80.9%
Credit loss ratio 2.0% 3.5%
Net loans and advances growth 105% 21%
Deposit growth 10% 45%
2010 2009
Total income N27.5 billion N25.6 billion
Total income increase 7% increase 23%
Total income contribution 57% 58%
Cost- to- income ratio 63.1% 62.5%
Credit loss ratio (0.4)% 3.7%
Net loans and advances growth 32% 16%
Deposit growth 11% 116%
2010 2009
Total income N8.7 billion N6.9 billion
Total income increase 25% decrease 25%
Total income contribution 18% 16%
Cost- to- income ratio 50.5% 50.4%
RSA clients increase 15% increase 13%
Assets under management increase 51% increase 35%
% of group gross income
% of group gross income
% of group gross income
23
Bu
sin
ess
un
it r
evie
w
Stanbic IBTC Bank PLC analysis of financial results 31 December 2010 24
Personal & Business Banking
Corporate & Investment Banking
Wealth
Change%
2010Nmillion
2009Nmillion
Change %
2010Nmillion
2009 Nmillion
Change%
2010Nmillion
2009Nmillion
Interest income (14) 9,391 10,955 5 14,381 13,716 (39) 570 938
Interest expense (30) 2,080 2,953 (73) 1,815 6,732 - -
Net interest income (9) 7,311 8,002 80 12,566 6,984 (39) 570 938
Impaired losses on loans & advances
>100 1,682 739 .>(100) (1,491) 3,217 - - -
Impairment charges on non-performing loans
55 1,366 882 .>(100) (3,533) 3,177 - - -
Impairment charges on performing loans
>(100) 316 (143) >100 2,042 40 - - -
Net interest income after impairment charges
(22) 5,629 7,263 >100 14,057 3,767 (39) 570 938
Non-interest revenue 35 4,462 3,293 (9) 17,255 18,947 36 8,106 5,981
Net fee & commission revenue 68 4,462 2,663 (1) 5,377 5,440 41 7,912 5,604
Trading revenue (100) - 626 (10) 11,689 13,048 - - -
Other revenue (100) - 4 (59) 189 459 (49) 194 377
Income from operations (4) 10,091 10,556 38 31,312 22,714 25 8,676 6,919
Operating expenses 29 12,126 9,385 13 17,969 15,883 26 4,381 3,484
Staff costs 23 5,967 4,870 3 7,413 7,215 12 1,631 1,453
Other operating expenses 36 6,159 4,515 22 10,556 8,668 35 2,750 2,031
Profit before tax >(100) (2,035) 1,171 95 13,343 6,831 25 4,295 3,435
Segmental income statement - IFRS
Total operating income
Operating income by business segment
Personal and Business Banking (PBB)
Profit after tax
2010 2009
Personal Banking
Business Banking
61%
39%
Personal Banking
Business Banking
58%
42%
Nmillion
200920100
12,236
11,31812,000
10,000
6,000
4,000
14,000
8,000
2,000
Nmillion
(1,000)
822
(1,000)12,236
500
(500)
1,000
02010 2009
Bu
sin
ess
un
it r
evie
w
Stanbic IBTC Bank PLC analysis of financial results 31 December 2010 26
Other key business statistics
Change %
2010 2009
Business volumes
Number of customers 30 587,609 452,912
Volume of transactions on Stanbic IBTC ATMs million 51 80.6 12.3
Value of transactions on Stanbic IBTC ATMs Nmillion 62 28,131 17,408
Business infrastructure
Branch network No >100 141 70
ATMs No 52 200 132
Change%
2010Nmillion
2009Nmillion
Net interest income (4) 7,691 8,052
Non-interest revenue 39 4,545 3,266
Credit impairment charges 9 1,133 1,038
Operating expenses 37 12,532 9,154
Profit before tax >(100) (1,429) 1,126
Profit after tax >(100) (1,000) 822
Total assets (15) 122,016 142,721
Total loans & advances (net) >100 53,560 26,150
Deposit liabilities 10 82,244 75,014
Cost-to-income ratio 102.4% 80.9%
Net interest margin 6.3% 5.6%
Credit loss ratio 2.0% 3.5%
Gross loan to deposit ratio 69.7% 39.6%
NPL/ total loans ratio 7.9% 19.8%
Performance highlights
Personal and Business Banking (PBB)
Loan portfolio breakdown
Change%
2010Nmillion
2009Nmillion
Gross loans and advances 93 57,335 29,721
Mortgage lending 96 10,643 5,422
Vehicle and asset finance (VAF) 36 9,953 7,333
Overdraft 8 8,308 7,664
Term loans >100 28,431 9,302
Provisions 6 (3,775) (3,571)
Provision for non-performing loans (3) (2,581) (2,652)
Provision for performing loans 91 (517) (270)
Interest in suspense 4 (677) (649)
Net loans and advances >100 53,560 26,150
Factors impacting the results
Impact of network expansion on PBB business
• The group investment in footprint has started yielding the desired results as evidenced by:
• 30% growth in number of customers to about 600,000.
• 56% increase in volume of business transactions.
• Significant improvement in deposit mix. Stable and low cost deposits accounted for 72% (2009:61%) of the PBB total deposits
• 60% growth in PBB savings deposits.
• Increase in loan growth. PBB business contribution increased from 22% to 31% in 2010.
• More than 40,000 accounts opened in the first six month of E.susu introduction into the traders market.
Favourable
• Increased transactional volumes and value per transaction,
which resulted in a significant growth in fees and commissions
income.
• Reduction in interest expense due to lower cost of funding.
• Significant growth in loan book especially mortgage
lending.
• Improvement in asset quality.
• Substantial growth in retail deposits especially savings
deposits.
Adverse
• Decrease in net interest income due to the negative
endowment as interest rates declined.
• Increase in operating costs driven by continued investment
in branch and ATM networks and staff to man these new
branches.
25
27
Bu
sin
ess
un
it r
evie
w
Stanbic IBTC Bank PLC analysis of financial results 31 December 2010 28
2010 2009
Total operating income
Total operating income by business segment
Corporate and investment banking (CIB)
Profit after tax
Investment banking
Global markets
Transactional products and services
29%
33%
38%
Investment banking
Global markets
Transactional products and services
24%
34%
42%
Nmillion
2010 20090
27,482
25,586
30,000
20,000
15,000
25,000
10,000
5,000
Nmillion
2010 2009
7,556
4,971
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
Deposit breakdown
Change%
2010Nmillion
2009Nmillion
Current accounts 25 49,662 39,695
Savings accounts 60 9,398 5,870
Term deposits (21) 23,184 29,449
Total deposit liabilities 10 82,244 75,014
• Liability generation drive is focused on the underbanked and unbanked sector of the economy. Leverage off technology to
develop innovative product “E.susu” targeted at the traders market.
• Continued focus on customer service and internal efficiencies.
• Hub and spoke branch strategy anchored on proximity to customers, speed of roll out and cost efficiency.
• Continued focus on “sweating” the investment in PBB business.
Mortgage lending• Business still at developmental stage in the country.
• Increased level of transaction witnessed in 2010 due to enhanced product awareness. Product accounted for 19% of total PBB
gross loans.
• 96% year-on-year growth in loan book witnessed in 2010.
Vehicle & asset fi nance (VAF)• One of the top players in VAF business in Nigeria.
• Good business growth witnessed in 2010 as evidenced by a 36% year-on-year growth.
Transactional and lending products• Increased non-interest revenue derived from growth in the transactional account base.
• Margin compression due to negative endowment effect partly offset by higher transactional lending volumes.
• Accounted for over 50% of PBB loan book.
• Lower level of non-performing loan.
Breakdown of non-performing loans
Change%
2010Nmillion
2009Nmillion
Total non-performing loans (2) 4,507 4,616
Overdraft (66) 1,389 4,061
Term loans >100 1,781 555
Vehicle and asset finance 735 -
Home loans 602 -
29
Bu
sin
ess
un
it r
evie
w
Stanbic IBTC Bank PLC analysis of financial results 31 December 2010 30
Performance highlights
Change%
2010Nmillion
2009Nmillion
Net interest income 12 18,109 16,117
Non-interest revenue (1) 9,373 9,469
Credit impairment charges >(100) (513) 3,820
Operating expenses 8 17,333 15,985
Profit before tax 84 10,662 5,781
Profit after tax 52 7,556 4,971
Total assets 33 251,475 188,610
Total loans & advances (net) 32 123,894 93,735
Deposit liabilities 11 104,222 94,186
Cost-to-income ratio 63.1% 62.5%
Net interest margin 7.2% 8.5%
Credit loss ratio (0.4%) 3.7%
Gross loan to deposit 124.5% 109.8%
NPL/total loan ratio 7.5% 12.5%
Corporate and investment banking (CIB)
Deposit breakdown
Change %
2010Nmillion
2009Nmillion
Current accounts 1 43,294 43,067
Savings accounts >100 87 10
Term deposits 19 60,841 51,109
Total deposit liabilities 11 104,222 94,186
Factors impacting the results
Favourable
• Reduction in interest expense as a result of the declining
deposit rates.
• Decrease in credit impairment charges as a result of
recoveries and provision releases due to improved asset
quality.
• Significant growth in commissions and fees attributable to
the gradual recovery in capital market activities and prices
in the first half of the year.
• Increased advisory activities within the investment banking
unit.
Adverse
• Challenging revenue environment characterised by
significant market liquidity and the resultant reduction in
interest rates.
• Dearth of profitable investment opportunities as well as
reduction in investment yields, which impacted interest
income.
• Decrease in foreign exchange volatility reduced the
appetite for hedging.
• Poor performance of the stock market in the second half of
the year affected revenue.
Loan portfolio breakdown
Change%
2010Nmillion
2009Nmillion
Gross loans and advances 26 129,807 103,379
Vehicle and asset finance (VAF) >100 4,445 2,176
Overdraft >100 57,506 20,867
Term loans 41 67,588 48,032
Other loans (99) 268 32,304
Provisions (39) (5,913) (9,644)
Provision for non-performing loans (51) (3,861) (7,894)
Provision for performing loans 41 (1,259) (890)
Interest in suspense (8) (793) (860)
Net loans and advances 32 123,894 93,735
Other key business statistics
Change%
2010 2009
Transaction revenue streams
Documentation fee Nmillion (32) 1,886 2,764
Commission on turnover Nmillion 3 1,150 1,116
Electronic banking transaction fees Nmillion (19) 289 357
Advisory fees Nmillion >100 6,463 2,395
Other fee & commission revenue Nmillion >100 302 24
Global foreign exchange and international banking services
Client turnover 28 2,431 1,902
Investor services
Transaction volumes No. 58 2,965 1,878
Holdings under custody Nmillion 44 524,824 364,819
31
Bu
sin
ess
un
it r
evie
w
Stanbic IBTC Bank PLC analysis of financial results 31 December 2010 32
Corporate and investment banking (CIB)
Total operating income Profit after tax
2010 2009
Total operating income by business segment
Asset management
Pension management
24%
76%
Asset management
Pension management
28%
72%
Nmillion
2010 2009
8,676
6,919
0
10,000
8,000
7,000
6,000
5,000
4,000
9,000
3,000
2,000
1,000
0
500
1,000
1,500
2,000
2,500
3,000
Nmillion2,899
2,345
2010 2009
Wealth
Global markets
• Low yields in investment securities as well as limited profitable investment outlets adversely affected revenue.
• Net interest income impacted by lower volumes and a negative endowment effect.
• Stable foreign exchange market affected revenue in contrast to high volatility in early 2009 which impacted revenue positively.
• Strong performance by equities and stock broking business impacted non-interest revenue positively. Stock broking business
maintained market dominance with over 25% market share.
• Introduced carbon trading desk in 2010.
Investment banking
• Net fees and commissions benefitting from closure of good advisory mandates.
• Reduction in credit impairment due to recoveries and improvement in asset quality.
• Continued maintenance of market leadership in project finance resulting in strong growth in business.
• Positioned to take advantage of opportunities in infrastructural financing.
• Key hires for new product offerings as well as adequately resourcing the existing product teams.
Transactional products and services
• Increased competitive pressure on margins.
• Strong growth in custody business. Grew holding under custody by 42% in 2010.
• Continued focus on the links between Nigeria and China.
33
Bu
sin
ess
un
it r
evie
w
Stanbic IBTC Bank PLC analysis of financial results 31 December 2010 34
Assets under management by business segment
Change%
2010Nmillion
2009Nmillion
Non-interest revenue 36 8,106 5,981
Operating expenses 26 4,381 3,484
Profit before tax 25 4,295 3,435
Profit after tax 24 2,899 2,345
Assets under management 51 580,210 384,060
Retirement savings accounts 15 834,298 726,879
Cost-to-income ratio 50.5% 50.4%
Performance highlights
0
Retirement savings accountsAsset management Pension management
Dec’07 Dec’08 Dec’09 Dec’10
600Nbillion No (000)
500
400
300
200
100
0
900
800
700
600
500
400
300
200
10061
158
49
238
43
341
91
489
Factors impacting the results
Favourable
• Continued growth in pension clients and related funds under
management.
• Gradual recovery of the capital markets in the first half of
the year impacted revenue positively.
• 51% growth in assets under management despite the tough
operating environment.
Wealth business in 2010
• Largest institutional investment business in Nigeria with Assets Under Management of N580 billion (US$3.8 billion).
• Introduced two fixed income focused funds – Stanbic IBTC Money Market and Stanbic IBTC Bond Funds in 2010.
• Obtained all domestic and international regulatory approvals for the establishment of a trusteeship business - Stanbic IBTC
Trustees Limited.
• Established the foundation for a robust distribution platform by leveraging on the increased branch network to drive growth strategy.
Adverse
• Low yields in investment securities and limited profitable
investment opportunities affected revenue.
• Low yields in investment securities and dearth of profitable
investment opportunities as a result of the significant market
liquidity witnessed in the first three quarters of 2010.
• Poor performance of stock market in the second half of
the year affecting both trade volumes and prices for the
asset management arm of the business.
Wealth
35
Cap
ital
man
agem
ent
Stanbic IBTC Bank PLC analysis of financial results 31 December 2010 36
Return on ordinary equity
Capital Management
Return on average equity Shareholders’ funds
Movement in shareholders’ funds
Nmillion
Balance as at 31 December 2009 80,480
Statutory reserves 1,450
Attributale earnings 7,352
Dividend paid (5,625)
Other movements 93
Balance as at 31 December 2010 83,750
Breakdown of return on average equity by business unit
Average equity
2010Nmillion
Pre tax ROaE2010
%
Post tax ROaE2010
%
Average equity
2009Nmillion
Pre tax ROaE2009
%
Post tax ROaE2009
%
PBB 24,882 (5.7) (4.0) 31,469 3.6 2.6
CIB 50,266 21.2 14.8 43,646 13.2 11.4
Wealth 6,967 61.4 33.6 5,457 62.9 34.0
Stanbic IBTC group 82,115 16.5 10.7 80,572 12.8 9.5
The group’s shareholders’ fund stood at N83,750 million,
representing a 4% growth over the N80,480 million recorded in
2009. The average equity grew by 2% to N82,115 million (2009:
N80,572 million). The group’s pre-tax return on average equity
averaged 16.3% in the last four years, while the post tax return
on average equity averaged 12.1% over the same period. The
group’s pre-tax return on average equity of 16.5% in a challenging
operating environment awashed with significant market liquidity
and lower yields on risk free investment securities is pleasing.
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
Dec’07 Dec’08 Dec’09 Dec’10
75,56380,664 80,480
83,750
Nmillion
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
Dec’07 Dec’08 Dec’09 Dec’100%
5%
10%
15%
20%
25%
ROaE (PAT)
Shareholders’ funds (average)
ROaE (PBT)
Nmillion
Capital management
Return on ordinary equityRisk weighted assets
3637
37
Inco
me
stat
emen
tan
alys
is
Stanbic IBTC Bank PLC analysis of financial results 31 December 2010 38
Income statement analysis
Total assets and risk weighted assets
Growth%
2010Nmillion
2009Nmillion
Tier I capital 4 83,657 80,480
Tier II capital 49 3,252 2,177
Total qualifying capital 5 86,909 82,657
Risk weighted assets 15 271,781 236,250
Capital adequacy
Tier I 30.8% 34.1%
Tier II 1.2% 0.9%
Total 32.0% 35.0%
Capital adequacy ratio computation
The group continued to maintain its strong capital base despite
the strong organic growth and growth in business operations
witnessed in the year. The group’s capital adequacy ratio as at
32% is significantly higher than the regulatory minimum of 10%.
The group’s capital is deemed adequate to support business
risks and contingencies and will enable us to continue to pursue
growth opportunities within the Nigerian market.
Risk weighted assets
Nmillion %
Dec’07 Dec’08 Dec’09 Dec’1000
10
20
30
40
50
60
70
80
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
Dec'07 Dec'08 Dec'09 Dec'10
Total assets 315,107 351,282 340,490 384,541
Risk-weighted assets 182,314 198,686 236,250 271,781
% risk weighted assets to total assets
57.9% 56.6% 69.4% 70.7%
Capital adequacy ratio
Capital adequacy ratioTier 1 capital adequacy ratio
Statutory minimum
Dec’07 Dec’08 Dec’09 Dec’100
5
10
15
20
25
30
35
40
45
%
41.741.4 41.540.5
35.034.1
32.030.8
Income statement analysis
Overview of group incomeNet interest income and margin analysisNon-interest revenueCredit impairment chargesOperating expensesTaxation
394143454649
39
Inco
me
stat
emen
tan
alys
is
Stanbic IBTC Bank PLC analysis of financial results 31 December 2010 40
Drivers of group income
Total operating income
CAGR (2007-2001):29%
Income statement summary
Change%
2010Nmillion
2009Nmillion
Net interest income 5 26,370 25,107
Non-interest revenue 18 22,024 18,716
Credit impairment charges (87) 620 4,858
Operating expenses 20 34,246 28,623
Profit before tax 31 13,528 10,342
Profit after tax 16 9,455 8,138
Total income per average employee
Overview of group income
Total income and profitability Operating income per average number of branches
Nmillion Nmillion
0 0
5.0
10.0
15.0
20.0
25.0
30.0
10,000
20,000
30,000
40,000
50,000
60,000
Dec’08Dec’07 Dec’09 Dec’10
Total income Profit after tax
0
10,000
20,000
30,000
40,000
50,000
60,000
Profit after tax/Total income
0
45.0
40.0
35.0
30.0
25.0
20.0
15.0
10.0
5.0
Nmillion %
Dec’07 Dec’08 Dec’09 Dec’10
22,619
42,49543,823
48,394
0
10,000
20,000
30,000
40,000
50,000
60,000
Nmillion
Dec’07 Dec’08 Dec’09 Dec’10
Operating income per branch
0
100
200
300
400
500
600
700
800
Nmillion
363
685664
459
Dec'07 Dec'08 Dec'09 Dec'10
Total income 22,480 42,495 43,823 48,394
Profit after tax 7,850 11,993 8,138 9,455
Profit after tax/Total income 34.9% 28.2% 18.6% 19.5%
Dec'07 Dec'08 Dec'09 Dec'10
Total income 22,480 42,495 43,823 48,394
Total income per average employee
18.7 25.6 21.8 21.5
0
10,000
20,000
30,000
40,000
50,000
60,000
Interestincome
Interestexpenses
Creditimpairment
charges
Operatingexpenses
Profit before taxation
Taxes Profit after taxation
7,989
620
13,528
4,073
9,455
34,359
34,246
Non-interestrevenue
22,024
Inco
me
stat
emen
tan
alys
is
Net interest income and net interest margin
CAGR (2007-2010): 40%
Prime interest rate
Component of interest income Yield on interest earning assets and
interest bearing liabilities
Breakdown of interest income and expenses
Factors impacting net interest income
Favourable
• Proactive restructuring of the funding base.
• Replacement of expensive deposits with cheaper funding.
• Good quality and well priced risk assets.
• Net interbank lender.
Adverse
• Limited profitable investment opportunities to channel
the significant market liquidity.
• Declining lending rates.
• Lower yields on investment securities.
Change%
2010Nmillion
2009Nmillion
Interest on investment securities (16) 10,395 12,302
Interest income on placement with banks (20) 3,686 4,602
Interest revenue on loans and advances (16) 20,278 24,016
Medium term advances/call loans 15 12,691 11,080
Overdrafts (58) 4,469 10,746
Home loans 11 1,146 1,036
Instalment sales & finance leases 71 1,972 1,154
Interest income (16) 34,359 40,920
Interest expense (49) 7,989 15,813
Savings accounts >100 248 102
Current accounts 52 590 387
Time deposit (55) 5,561 12,433
Inter-bank takings (42) 1,036 1,787
Borrowed funds (50) 554 1,104
Net interest income 5 26,370 25,107
Net interest income and margin analysis
Nmillion %
0
5,000
10,000
15,000
20,000
25,000
30,000
0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
%
SIBTC prime interest rate
Inflation (12 month average)
02007 2008 2009 2010
12.513.7
1718
25
20
15
10
5
Securities Placements Loans & advances
0%
Dec’07 Dec’08 Dec’09 Dec’10
120%
100%
80%
60%
40%
20%
34% 27% 30% 30%
56% 61% 59% 59%
10%12%
11% 11%
Cost of interest bearing liabilities
Yield on interest earning assets
Net interest margin
0%Dec’07 Dec’08 Dec’09 Dec’10
16%
14%
12%
10%
6%
8%
2%
4%
3.3%
6.9%
10.9%
13.0%
7.7%
7.4%
Dec'07 Dec'08 Dec'09 Dec'10
Net interest income 9,601 22,362 25,107 26,370
Net interest margin before impairment charges
5.8% 6.4% 7.4% 6.9%
Net interest margin before impairment charges
4.6% 4.9% 5.9% 6.7%
41 Stanbic IBTC Bank PLC analysis of financial results 31 December 2010 42
43
Inco
me
stat
emen
tan
alys
is
Stanbic IBTC Bank PLC analysis of financial results 31 December 2010 44
Non-interest revenue
CAGR (2007-2010): 20%
Composition of non-interest revenue
Breakdown of non-interest revenue
Change%
2010Nmillion
2009Nmillion
Net fee & commission revenue 38 18,983 13,707
Point of representation transaction fee 12 2,850 2,553
Documentation & administration fee (9) 3,107 3,406
Electronic banking transaction fee 15 447 390
Knowledge based/professional service fee >100 12,267 5,715
Other fee & commission revenue (81) 312 1,643
Trading revenue (36) 2,658 4,169
Foreign exchange (36) 2,658 4,169
Other revenue (54) 383 840
Rental income (81) 6 31
Investment income (48) 126 243
Other non-bank revenue (56) 251 566
Total non interest revenue 18 22,024 18,716
Favourable
• Growth in account transaction fees driven by increase in
customer base and transactional volumes.
• Significant increase in credit related fees due to strong
growth in loan book.
• Gradual recovery of the capital markets in the first half of
the year impacted revenue positively in stock broking,
custody pensions and asset management businesses.
• Higher level of advisory mandates within investment
banking.
• Increased electronic banking revenue due to increased
availability of ATMs with lowest downtime in the industry.
Growth in transaction volumes as evidenced by increase in
transaction based commissions.
• Non-interest revenue benefitted from the group diversified
business model.
Adverse
• Low volatility in the foreign exchange market resulting in
lower trading revenue.
• Poor performance of the stock exchange in the second half
of year impacted revenue of our capital market related
businesses.
Non-interest revenue mix
Non-interest revenue
2010 2009
Factors impacting non-interest revenue
Commissions
Fees
Trading revenue
Other income
19%
67%
12%
2%
Commissions
Fees
Trading revenue
Other income
17%
57%
22%
4%
Percentage of total income
Non-interest revenue
0
Dec’07 Dec’08 Dec’09 Dec’10
25,000
Nmillion
20,000
15,000
10,000
5,000
0
70%
60%
50%
40%
30%
20%
10%
13,018
20,13318,716
22,024
0%
120%
100%
80%
60%
40%
20%
Dec'07 Dec'08 Dec '09 Dec'10
Other revenue 1,939 1,156 840 383
Trading revenue 1,990 4,115 4,169 2,658
Net fee & commission revenue 9,089 14,862 13,707 18,983
45
Inco
me
stat
emen
tan
alys
is
Stanbic IBTC Bank PLC analysis of financial results 31 December 2010 46
Change%
2010Nmillion
2009Nmillion
Provision for loan losses
Non performing loans (38) 3,814 6,163
Performing loans >100 623 156
Total provision for credit losses (30) 4,437 6,319
Provision for other assets (47) 626 1,184
Recoveries 94 (522) (269)
Provisions no longer required 63 (3,921) (2,401)
Bad debt written off >(100) - 25
Credit impairment charges (87) 620 4,858
Favourable
• Reduction in credit impairment charges due to
effectiveness of risk management processes and improved
loan book quality.
• Lower impairment charge within Corporate and Investment
Banking as a result of improved debt servicing ability and
portfolio provision releases.
• Improved collections capability, including strategies to
manage risk and expand operational capacity.
Adverse
• Continued pressure on recovery values of collateral.
Operating expenses
Operating expenses Cost and income growth
Change%
2010Nmillion
2009Nmillion
Staff costs 10 14,781 13,469
Other operating expenses:
Auditor’s remuneration (2) 135 138
Communication (16) 534 638
Depreciation 57 4,034 2,567
Information technology 58 2,431 1,538
Marketing expenses 10 1,318 1,197
Premises 9 2,764 2,527
Travel and transportation (6) 1,377 1,466
Training 6 437 412
Others 38 6,435 4,671
Total other operating expenses 28 19,465 15,154
Total operating expenses 20 34,246 28,623
Average number of employee 12 2,248 2,009
Cost per average employee (Nmillion) 7 15.2 14.2
Breakdown of operating cost
Credit impairment charges
Movement in credit impairment charges
Credit impairment charges
Credit impairment charges and interest income
Factors impacting credit impairment charges
Credit loss ratioCredit impairment charge on NPLs
Credit impairment charge on PLs
(2,000)
Dec’07 Dec’08 Dec’09 Dec’10
5,000
4,000
3,000
2,000
1,000
0
3%
4%
5%
2%
1%
0%
(1,000)
1,681
362
4,607
413
4,504
354(835)
1,455
Nmillion
Credit impairment charges as % of net interest income
Credit impairment charges as % of interest income
0 Dec’07 Dec’08 Dec’09 Dec’10
25
%
20
15
5
10
Dec’07 Dec’08 Dec’09 Dec’10
Nmillion
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
9,444
22,850
28,623
34,246
Cost-to-income ratio
Total income growth Total cost growth
0
Dec’07 Dec’08 Dec’09 Dec’10
160
140
120
100
80
60
40
20
0
80
70
60
50
40
30
20
10
413
30
42
142
89
25
3
20
10
Growth % Ratio %
47
Inco
me
stat
emen
tan
alys
is
Stanbic IBTC Bank PLC analysis of financial results 31 December 2010 48
Operating cost mix Staff cost per average employee
Operating cost per average number of branches Employee efficiency and productivity
Operating expenses impacted by
Staff costs and headcount
• Increased headcount in business support functions especially credit attributable to the need to strengthen our risk management
process as we continued the implementation of our retail growth strategy.
• Growth in business volume and points of representation requiring additional client facing and support staff and training and
retraining of staff.
• Efficient deployment of human resources. The headcount in Personal & Business Banking grew by 11% despite the 101% increase
in the number of branches.
Other operating expenses
• Higher Information Technology and depreciation costs attributable to branch expansion and increased ATMs. Number of branches and
ATMs grew by 101% and 52% respectively in the last one year. Depreciation cost grew by 57% and represented 12% of total operating
costs in 2010.
• Growth in premises costs resulting from footprint expansion and rental escalations.
• Reduction in communication costs as a result of deployment of cheaper sources of communication.
• Increased marketing and marketing costs relating to branding initiatives.
Operating expenses
DepreciationStaff cost
Other operating expenses
0%
Dec’07 Dec’08 Dec’09 Dec’10
120%
100%
80%
60%
40%
20%49% 46%
6%
48%
47% 43%
12%
45%
49%44%
8% 9%
Staff cost per average employeeStaff cost
0
Dec’07 Dec’08 Dec’09 Dec’10
16,000
12,000
14,000
10,000
6,000
8,000
2,000
4,000
0
8.0
6.0
7.0
5.0
3.0
4.0
1.0
2.0
Nmillion Nmillion
4,660
10,426
13,469
14,781
0
Dec’07 Dec’08 Dec’09 Dec’10
500
Nmillion
300
450
250
150
200
350
300
50
100
152
369
325
Operating cost per branch
434
Change %
2010 2009
Personal & business banking 11 1,109 1,003
Corporate & investment banking 9 248 228
Wealth 3 300 291
Credit 54 77 50
Other business enablers 18 514 437
Average number of employees 12 2,248 2,009
Average headcount by business unit
Cost per average employee
Total income per average employee
0
Dec’07 Dec’08 Dec’09 Dec’10
7.9
13.8 14.215.2
18.7
25.6
21.821.5
30
%
25
20
15
10
5
49
Bal
ance
sh
eet
anal
ysis
Stanbic IBTC Bank PLC analysis of financial results 31 December 2010 50
Balance sheet analysis
Taxation charge and effective tax rate
Effective tax rate
Nmillion %
0
Dec’07 Dec’08 Dec’09 Dec’10
500
300
450
250
150
200
350
300
50
100
Total tax charge
3,162
2,632
4,073
2,204
0
50
40
20
30
10
• Increase in taxation charge due to under provision in prior year.
Taxation
Change %
2010 Nmillion
2009 Nmillion
Income tax 3 3,328 3,231
Education tax (20) 165 207
Technology tax (31) 71 103
Total income tax charge 1 3,564 3,541
Under/(over) provision in prior years
>(100) 720 (722)
Deferred tax (57) (360) (830)
Charge for the year 97 3,924 1,989
Withholding tax charge (31) 149 215
Total tax charge 85 4,073 2,204
Movement in tax charge
Balance sheet analysis
Overview of group consolidated assetsLoans and advancesLoans and advances performanceDeposits and current accountsFunding and liquidity
5153565961
51
Bal
ance
sh
eet
anal
ysis
Stanbic IBTC Bank PLC analysis of financial results 31 December 2010 52
Overview of group balance sheet
Asset mix
Change%
2010Nmillion
2009Nmillion
PBB (15) 122.016 142,721
CIB 33 251,475 188,610
Wealth 21 11,050 9,159
Stanbic IBTC group 13 384,541 340,490
Total assets by business unit
Return on average assets Balance sheet breakdown
Overview of group consolidated assets
5.0%
4.0%
4.5%
3.0%
3.5%
2.0%
2.5%
0.5%
1.0%
1.5%
0
Dec’07 Dec’08 Dec’09 Dec’10
Return on average assets (pre tax)
Return on average assets (post tax)
0
Dec’07 Dec’08 Dec’09 Dec’10
120%
100%
60%
40%
80%
20%
4%
15%
25%
26%
22%
8%
3%4%
32%
29%
22%
10%
2%3%
23%
35%
21%
16%
3%3%
23%
46%
12%
13%
Loans & advances
Treasury bills Investment securities
Due from other banks Other assets
Cash & short term funds
Nbillion
450
400
350
250
300
200
50
100
150
0
2010 2009
Interbank & cash Investment securities
Treasury bills Other assets
Loans & advances to customers Property & equipment
13%
340
385
99 85
178 120
48
17
31
71
26
27
1211
0
450,000
350,000
250,000
150,000
50,000
Nmillion
400,000
300,000
200,000
100,000
Total assets Interbank & cash
Treasury bills Loans & advances (net)
Other assets Investmentsecurities
Property & equipment
384,541 98,707
12,428 177,454
17,11547,585
31,252
53
Bal
ance
sh
eet
anal
ysis
Stanbic IBTC Bank PLC analysis of financial results 31 December 2010 54
Loans and advances (Gross)
CAGR (2007-2010): 26%
Composition of gross loans and advances
Loans and advances contribution by business unit
Loans and advances by maturity
Breakdown of loans and advances by industry
Loans and advances
2010 2009
Overdrafts
Home loans
Term loans
Instalment sales (VAF)
35%
6%51%
8%
22%
78%
PBB
CIB
31%
69%
PBB
CIB
Nbillion
200
160
180
120
140
80
100
20
40
60
0
Dec’07 Dec’08 Dec’09 Dec’10
93
113
133
187
Change%
2010Nmillion
2009Nmillion
0-30 days 7 45,326 42,362
1-3 months (5) 43,882 46,370
3-6 months >100 12,316 3,775
6-12 months (31) 8,164 11,825
Over 12 months >100 77,454 28,768
Gross loans and advances 41 187,142 133,100
Sector Change %
2010Nmillion
2009Nmillion
Agriculture >100 1,475 639
Oil and gas (59) 10,654 26,273
Capital market 5 661 632
Consumer credit - 13,719 13,736
Manufacturing (7) 38,460 41,369
Mining & quarrying >100 10,644 80
Mortgage >100 10,643 2,344
Real estate and construction >100 7,630 2,324
Finance & insurance (82) 490 2,657
Government >100 3,926 406
Power >100 11,512 2,262
Other public utilities 73 39,210 22,702
Transportation >100 5,954 2,535
Communication >100 32,093 14,849
Education (76) 71 292
Gross loans and advances 41 187,142 133,100
55
Bal
ance
sh
eet
anal
ysis
Stanbic IBTC Bank PLC analysis of financial results 31 December 2010 56
Loans and advances
• The group continued to unlock profitable investment opportunities by growing its loan book by 41% despite the significant
market liquidity and increased competition for good quality credits.
• Growth in the contribution of Personal & Business Banking to the loan book.
• Continued focus on developing business banking arm of Personal and Business Banking.
• Potential increase in annuity income as medium to long term loans (over 12 months) accounted for 41% (2009:21%) of total loan portfolio.
• Loan and advances to all economic sectors with increased contribution towards infrastructural finance, communication, property
and mortgage financing.
Loans and advances by sector
Oil & gas5.7%
Agriculture0.8%
Capital market0.4%
Real estate & construction4.1%Finance &
insurance0.3%
Government2.1%
Power6.2%
Mortage5.7%
Consumer credit7.3%
Mining & quarrying5.7%
Education0.0%
Communication17.1%
Transportation3.2%
Manufacturing20.6%
Other public utilities21.0%
Loans and advances
Non-performing loans Risk asset quality
Loans and advances performance
Nbillion %
20
18
16
14
12
8
10
2
4
6
0
Dec’08Dec’07 Dec’09 Dec’10
Non performing loans NPL/total loan ratio
0
16
12
14
10
6
8
2
4
11.2
15.5
18.8
14.2
Nbillion
200
150
100
50
0
Dec’07 Dec’08 Dec’09 Dec’10
Provision adequacy
Gross loans & advances Non performing loans
11.2
93.1
15.5 18.8
133.1
14.2
187.1
113.1
0.0%
20%
40%
60%
80%
100%
120%
Credit loss as a percentage of gross loans and advances
Composition of non-performing loans
Nmillion
20,000
15,000
10,000
5,000
0
Dec’10 Dec’09
Substandard Doubtful Lost
1,499
2,748
11,501
5,565
9,990
1,764
16.0%
12.0%
8.0%
14.0%
10.0%
6.0%
4.0%
0
2.0%0.3%
5.2%
7.6%
14.1%
9.9%
3.6%
Dec’08Dec’07 Dec’09 Dec’10
NPL/total loan Total provision/total loan
Credit loss ratio
57
Bal
ance
sh
eet
anal
ysis
Stanbic IBTC Bank PLC analysis of financial results 31 December 2010 58
NPL and coverage ratio
• The group participated in the sale of toxic assets to Asset Management Company of Nigeria (AMCON) to the tune of N14 million
This did not materially influence the reduction in the group’s NPL and NPL ratio.
• The group witnessed improved asset quality in 2010. The non-performing loans were down by 24% despite loan growth.
• 61% of the total NPL is concentrated in the hands of four CIB obligors. We believe that these NPLs are recoverable and efforts
are geared towards its collection.
• Credit management team has been strengthened with experienced and qualified personnel and also a number of new systems
(e.g. Adaptiv, Financial spreading and the Credit rating tool) are currently being rolled out to support credit reporting
and exposure monitoring.
Non-performing loans by industry Balance sheet provision breakdown
NPL concentration by business unit
Others0.1%
Communication2.7%
Real estate & construction
0.0%
Generalcommerce22.4%
Oil & Gas56.4%
Transportation12.7%
Finance &insurance
5.6%
Manufacturing0.1%
Dec’08Dec’07 Dec’09 Dec’10
NPL/total loans Provision adequacy
103.6%
67.2%
70.2%
68.1%
12%13.7% 14.1%
7.6%
NPL breakdown 2010Nmillion
2010 % of total NPL
2009Nmillion
2009% of total NPL
Top 2 CIB NPLs (2009: Top 4) 8,676 60.9 10,541 56.0
Other CIB NPLs 1,054 7.4 2,419 12.8
PBB NPLs 4,507 31.7 3,947 21.0
Margin NPLs - - 1,924 10.2
Total NPLs 14,237 100.0 18,830 100.0
Loans and advances performance
2010 Nmillion
2009 Nmillion
Non performing 6,435 10,546
Performing 1,783 1,160
Interest in suspense 1,470 1,509
Total balance sheet provision 9,688 13,215
Gross NPL balance Nmillion
Interest in suspense Nmillion
Security value
NmillionNet NPL Nmillion
Provision Nmillion
Provision adequacy without security
%
Provision adequacy with security
%
Oil & gas 8,025 686 9,190 7,339 3,457 52 166
Other sectors 6,212 784 4,392 5,428 4,761 89 160
Closing balances 14,237 1,470 13,582 12,767 8,218 68 163
Provision adequacy
59
Bal
ance
sh
eet
anal
ysis
Stanbic IBTC Bank PLC analysis of financial results 31 December 2010 60
Deposit liabilities
CAGR (2007-2010):38%
Deposits by type Deposits contribution by business segment
Breakdown of deposit liabilities Deposit liabilities
• The group took a conscious decision to exit expensive deposits in the light of significant market liquidity and declining interest
rates. The decision resulted in lower cost of funding and improvement in the ratio of lower cost deposits from
52% to 55%.
• Significant increase in low cost deposits as evidenced by the 75% growth in current and savings deposits.
• The PBB contribution to deposit portfolio was stable in 2010. This is expected to improve as we continued to grow our retail
business.
• Continued focus on attracting lower priced deposits.
Deposits and current accounts
PBB
CIB
44%
56%
Current deposits
Savings deposits
Term deposits
Domiciliary deposits
42%
5%
8%
45%
0
Dec’07 Dec’08 Dec’09 Dec’10
200,000
Nmillion
180,000
160,000
100,000
80,000
60,000
140,000
120,000
40,000
20,000
71,391
95,262
169,200
186,466
0
120
%
100
60
40
80
20
Dec’07
Current deposit Savings deposit
Domiciliary deposit Term deposit
Dec’08 Dec’09 Dec’10
45 50 48 45
35 27 48 45
1317
98
76
35
61
Bal
ance
sh
eet
anal
ysis
Stanbic IBTC Bank PLC analysis of financial results 31 December 2010 62
Funding and liquidity
Nbillion
Assets Liabilities
99 186
12
177
48
17
31
56
36
18
84
4
Interbank & cash
Treasury bills
Loans & advances to customers
Investment securities
Other assets
Property & equipment
Deposits
Due to other banks
Taxation
Other liabilities
Long term loans
Equity
Funding mix
Funding and liquidity
Diversity of funding
Deposits
Borrowings
Other liabilities
Equity
49%
19%
10%
22%
0%
Dec’07 Dec’08 Dec’09 Dec’10
120%
100%
60%
40%
80%
20%
23% 27% 50% 49%
23% 23%11% 10%
24% 23% 24% 22%
30%27%
15% 19%
Other liabilities
Borrowings Equity
Deposits
Group2010
Nmillion
Bank2010
Nmillion
Group2009
Nmillion
Bank2009
Nmillion
Specified liquid assets
Cash 7,368 7,367 4,020 4,016
Balance with CBN 2,681 2,681 3,752 3,752
Net balance held with banks within Nigeria 1,293 73 1,113 72
Treasury bills (Unpledged) 3,053 3,053 7,068 7,068
Net interbank placement with other banks 10,983 10,983 17,710 17,710
Federal Government of Nigeria bonds 27,849 26,401 45,961 44,926
Stabilisation securities 18 18
Total asset (A) 53,245 50,576 79,624 77,544
Current liabilities
Adjusted deposit liabilities 170,726 171,618 154,085 155,050
Due to other banks in Nigeria 293 293 953 953
Total liabilities (B) 171,019 171,911 155,038 156,003
Liquidity ratio A/B*100 31.1% 29.4% 51.4% 49.7%
Liquidity ratio computation
2010Nmillion
2009Nmillion
Marketable assets 37,570 69,479
Short-term foreign currency placements 47,747 1,297
Total unencumbered marketable assets 85,317 70,776
Other readily accessible liquidity 18,200 28,300
Total unencumbered surplus liquidity 103,517 99,076
Group unencumbered surplus liquidity
Liquidity buffer
• Portfolios of highly marketable securities are maintained as protection against unexpected disruptions in cash flows. These portfolios are
managed on the basis of diversification, liquidity and yield.
• The group encumbered surplus liquidity increased from N99.1 billion as at 31 December 2009 to N103.5 billion as at end
December 2010, reflecting the group’s prudent liquidity management approach as informed by stress testing requirements and prevailing
market conditions.
Liquidity stress testing and scenario analysis
• Anticipated on and off balance sheet cashflows are subjected to a variety of bank specific and systemic stresses and scenarios in order
to evaluate the impact of unlikely but plausible events on liquidity positions.
63
Bal
ance
sh
eet
anal
ysis
Stanbic IBTC Bank PLC analysis of financial results 31 December 2010 64
Maturities of group assets and liabilities
Funding and liquidity
• Stable sources of funding to exploit market opportunities.
• Primary sources of funding are from deposits and equity. 49% of total assets were funded by deposit liabilities.
• Continued focus on growing retail business and attracting lower priced deposits.
• Medium to long term funding from the Development and Financial Institutions form part of the group’s diversified funding base.
• Liquid and flexible balance sheet with liquidity ratio of 31% well above the regulatory minimum of 25%.
• Very active in the interbank market as a net placer of funds.
• Concentration risk limits are used to ensure that funding diversification is maintained across products and sectors.
Funding and liquidity
0-30 days
Nmillion
1-3 months Nmillion
3-6 months Nmillion
6-12 months Nmillion
1-5 years
Nmillion
Over 5 years
NmillionTotal
Nmillion
Total assets 135,812 74,897 17,059 22,767 86,776 47,230 384,541
Total liabilities 221,302 22,048 19,962 21,831 10,737 3,535 299,415
Net liquidity gap (85,490) 52,849 (2,903) 936 76,039 43,695 85,126
Liquidity ratioLoans to customer’s deposits Statutory minimum
0
Dec’07 Dec’08 Dec’09 Dec’10
140%
120%
100%
80%
20%
40%
60%
0%
90%
80%
70%
60%
50%
40%
30%
20%
10%
130
119
79
100
65
Mar
ket
&sh
areh
old
erin
form
atio
n
Stanbic IBTC Bank PLC analysis of financial results 31 December 2010 66
Market & shareholder information
Market capitalisation Price-to-book
The group share price out performed both the NSE All Share Index and the Banking Industry index in 2010. The group’s price-to-book ratio
of 2.0 times is one of the highest in the banking industry. As at year end, the group ranked 10th in market capitalization amongst the 217
listed equities on the Nigerian Stock Exchange.
Change %
2010 2009
Number of shares at the end of the year thousands 0 18,750,000 18,750,000
Net asset value Nmillion 4 85,126 81,497
Net asset value per share kobo 4 454 435
Share price at the end of the year kobo 23 920 747
Market capitalisation at end of the year Nbillion 23 173 140
Price-to-book at end of the year times 18 2.0 1.7
Market capitalisation and price-to-book ratio
0
372.9
Dec’07
204.4
Dec’08
140.0
172.5
Dec’09 Dec’10
400
Nbillion
350
200
150
100
300
250
50
Price-to-bookNet asset value per share
0Dec’08 Dec’09 Dec’10
700Kobo Times
600
500
400
100
200
300
3.0
2.5
2.0
0.5
1.0
1.5
0
3.5
Dec’07
403434 435 454
Market & shareholder information
Market capitalisation and price-to-book ratioEquity and range analysisShare capital history
666768
67
Mar
ket
&sh
areh
old
erin
form
atio
n
Stanbic IBTC Bank PLC analysis of financial results 31 December 2010 68
Share range No. of shareholders
Percentage of shareholders
No. of holding Percentage holdings
1 - 1,000 27,455 25.1 22,910,238 0.1
1,001 - 5,000 47,041 43.0 130,213,858 0.7
5,001 - 10,000 14,029 12.8 118,917,909 0.6
10,001 - 50,000 15,487 14.2 371,398,470 2.0
50,001 - 100,000 2,581 2.4 206,346,836 1.1
100,001 - 500,000 2,225 2.0 506,010,291 2.7
500,001 - 1,000,000 281 0.3 219,130,334 1.2
1,000,001 - 5,000,000 204 0.2 421,406,877 2.2
5,000,001 - 10,000,000 41 0.0 292,779,376 1.6
10,000,001 - 50,000,000 54 0.0 1,310,095,341 7.0
50,000,001 - 18,750,000,000 35 0.0 15,150,790,470 80.8
Grand Total 109,433 100 18,750,000,000 100
Foreign shareholders 148 9,759,536,445 52.0
Nigerian shareholders 109,285 8,990,463,555 47.9
109,433 18,750,000,000 100
Significant shareholding
Shareholder No of shares held Percentage shareholding
Stanbic Africa Holdings Limited 9,518,617,926 50.75
First Century International Limited 1,400,790,732 7.47
Share capital history
Year Authorized (N000)
Issued & fully paid-up (N000) Consideration
Increase Cumulative Increase Cumulative
1989 - 20,000 - 12,000 Cash
1991 30,000 50,000 12,000 24,000 Bonus (1:1)
1992 - 50,000 16,000 40,000 Bonus (2:3)
1994 100,000 150,000 60,000 100,000 Bonus (3:2)
1996 50,000 200,000 100,000 200,000 Bonus (1:1)
1997 400,000 600,000 400,000 600,000 Bonus (2:1)
2001 400,000 1,000,000 400,000 1,000,000 Bonus (2:3)
2003 1,000,000 2,000,000 1,000,000 2,000,000 Bonus (1:1)
2004 2,000,000 4,000,000 - 2,000,000
2005 1,000,000 5,000,000 935,492 2,935,492 Cash
2006 1,500,000 6,500,000 3,314,508 6,250,000 Cash and share exchange
2007 3,500,000 10,000,000 3,125,000 9,375,000 Share exchange
The shareholding pattern as at 31 December 2010 is as stated below:
Equity and range analysis
Mar
ket
&sh
areh
old
erin
form
atio
n
69
Oth
erin
form
atio
n
Stanbic IBTC Bank PLC analysis of financial results 31 December 2010 70
Otherinformation
Basic earnings per ordinary share (EPS) (kobo)
CAGR (%)
Dividend cover (times)
Dividend per share (kobo)
Net asset value (Nmillion)
Net asset value per share (kobo)
Price-to-book ratio (times)
Profi t attributable to ordinary shareholders
Profi t for the period (Nmillion)
After tax return on average equity (ROaE) (%)
Shares in issue (number)
Total capital adequacy ratio (%)
Turnover in shares traded (%)
Weighted average number of share (number)
Cost-to-income ratio (%)
Credit loss ratio (%)
Gross impairment coverage (%)
Non performing loans ratio (%)
Provisions for non-performing loans (Nmillion)
Provision of performing loans (Nmillion)
Net interest margin (%)
Non-interest revenue to total income (%)
Financial and other defi nitions
Earnings attributable to ordinary shareholders divided by the ordinary shares in issue.
Compound annual growth rate.
Earnings per share divided by dividend per share.
Total dividends to ordinary shareholders including dividends and scrip distributions declared per share in respect of the period.
Equity attributable to ordinary shareholders.
Net asset value divided by the number of ordinary shares in issue at the end of the period.
Market capitalization divided by net asset value
Profit for the period attributable to ordinary shareholders, calculated as profit for the period less minority interests.
Income statement profit attributable to ordinary shareholders and minorities shareholders for the period.
Profit after tax as a percentage of annual average ordinary shareholders’ funds.
Number of ordinary shares in issue as listed on the floor of the Nigerian Stock Exchange (NSE)
Regulatory capital divided by risk-weighted assets.
Number of shares traded during the period as a percentage of the weighted average number of shares.
The weighted average number of ordinary shares in issue during the period as recorded on the NSE
Operating expenses as a percentage of total income
Total impairment charges on loans and advances per the income statement as a percentage of gross loans and advances
Non-performing loan impairments as a percentage of gross non-performing loans.
Total non performing loans as a percentage of gross loans and advances.
Provisions for specific identified credit losses.
Provisions for credit losses inherent in the performing loan book.
Net interest income as a percentage of total assets
Non-interest revenue as a percentage of total income.
Other information
Financial and other defi nitionsContact details Notes
707172
71 72
Chief financial officer
Ronald Pfende
Tel: +234 1 4488900
e-mail : [email protected]
Company secretary
Angela Omo-Dare
Tel: +234 1 4488900
e-mail: [email protected]
Head, investor relations
Oluwatosin Odutayo
Tel: +234 1 4488900
e-mail: [email protected]
25
Registered address & head office Stanbic IBTC Bank PLC
I.B.T.C. Place
Walter Carrington Crescent
P. O. Box 71707
Victoria Island
Lagos, Nigeria
e-mail: [email protected]
Stanbic IBTC Bank PLC analysis of financial results 31 December 2010
Notes
Oth
erin
form
atio
n
Contact details