Last Update24 Jun 25
Subject: Stanbic IBTC Concludes Oversubscribed Rights Issue, Raises N181.39bn to Strengthen Capital Base
Stanbic IBTC Holdings Plc has successfully completed its Rights Issue, raising N181.39 billion, following a 121.97% oversubscription. The offering, which was launched to bolster the group’s capital position, received robust investor support and reflects strong market confidence in the company’s long-term strategy and performance trajectory.
Key Highlights:
- Oversubscription Signals Strong Demand: A total of 2,773 valid applications were received for 3.59 billion shares, surpassing the 2.94 billion shares on offer. The issue was priced at N50.50 per share, and the subscription demand totaled N181.38 billion, with the Central Bank of Nigeria clearing N181.39 billion under its Capital Verification Exercise.
- Full Allotment and Regulatory Approval: All valid applications were accepted with 100% allotment, and no single application was rejected. Overpayments of N16.83 million by some receiving agents will be refunded.
- Strong Participation from Existing Shareholders:
- 2,665 shareholders fully took up their 2.49 billion provisionally allotted shares, worth N125.70 billion.
- Within this group, 1,579 shareholders went further, requesting 954.10 million additional shares, valued at N48.18 billion, demonstrating deeper commitment to the company’s growth.
- Rights Trading and Renunciation Activity:
- 79 applications were submitted through rights traded on the Nigerian Exchange, representing 127.80 million shares.
- A total of 307.22 million shares were renounced, including 282.98 million fully renounced units.
- Allotment of Additional Shares and Refunds:
- Renounced shares were allotted pro-rata to shareholders who applied for extra units, resulting in a 32.2% allotment rate for additional shares.
- Unallotted shares totaled 646.87 million units, and excess funds of N32.67 billion will be refunded to shareholders accordingly.
Strategic Implications: The successful completion of this Rights Issue, particularly at a time of heightened macroeconomic volatility, is a testament to Stanbic IBTC’s reputation for operational excellence and investor trust. The fresh capital is expected to support the group’s growth ambitions, enhance regulatory capital adequacy, and provide headroom for lending and investment activities across its core banking and financial services subsidiaries.
With full subscription and efficient execution, Stanbic IBTC now stands in a stronger financial position to capitalize on growth opportunities in Nigeria’s dynamic financial landscape, reinforcing its status as a leading player in the sector.
Stanbic IBTC Holdings Plc recorded a 79.81% year-on-year jump in net profit to ₦82.06 billion in Q1 2025, driven by strong growth in net interest income and effective repricing of interest-earning assets. The group’s ability to optimize yields while cutting funding costs proved pivotal in sustaining this exceptional bottom-line expansion.
Key Highlights from Q1 2025 Earnings:
- Net Interest Income Soared 94.9% YoY Stanbic IBTC reported a significant improvement in net interest income, reaching ₦149.9 billion, thanks to a 55.84% rise in interest income to ₦180.47 billion, and a 21.4% drop in interest expenses, now at ₦30.58 billion. This outcome reflected better asset yields (c.19%) and strategic cost containment on funding lines.
- Asset Repricing Strategy Paying Off The group benefitted from a 27.9% year-on-year expansion in interest-earning assets, further amplified by an environment of rising interest rates. This underlines management’s tactical success in asset allocation and yield optimization.
- Non-Interest Revenue Fell 13.4% Despite strong core banking performance, non-interest revenue declined to ₦53.1 billion, dragged by a ₦7.0 billion trading loss in fixed income and currency markets. However, this was partly cushioned by a 44.63% rise in fee and commission income to ₦60.29 billion, showcasing strength in transactional and advisory services.
- Operating Income and Profitability on the Rise Operating income grew by 46.9% year on year to ₦203.0 billion, while operating expenses rose 31.6% to ₦65.4 billion, a manageable increase in the context of top-line growth. This helped push pre-tax profit to ₦116.42 billion, up 85.63% from the prior year.
- Tax Impact Slightly Dampens Bottom Line The group’s tax expense more than doubled year on year, yet the bottom line still expanded significantly to ₦82.06 billion.
- Asset Quality Weakens Despite Improved Recoveries A concern for investors is the rise in the NPL ratio to 4.4% (from 2.9%), signaling pressure in credit quality. However, a ₦3.4 billion impairment write-back suggests improved recoveries from legacy loan exposures, softening the impact of new defaults.
- Strong Capital Position Maintained Stanbic IBTC’s capital adequacy ratio of 17.1% remains well above the regulatory minimum of 11%, reinforcing the bank’s capacity to absorb credit and market shocks.
Outlook:
Stanbic IBTC’s Q1 2025 earnings confirm its strength in core banking operations and capital efficiency, even as non-interest income segments face volatility. The sustained net interest margin expansion, paired with disciplined cost control and solid capital buffers, position the group well for continued profitability. However, rising NPLs may warrant closer investor scrutiny in the coming quarters.
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