stanbic ibtc holdings plc - the vault...stanbic ibtc holdings plc 2014 1 group results in brie...

1

Group results in brief

Business unitreview

Income statementanalysis

Balance sheet analysis

Capital management

Market and Shareholderinformation

Otherinformation

Group resultsin brief

Analysis of financial results for the six months ended 30 June

Stanbic IBTC Holdings PLC

2014

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Business unitreview


Capital management


Otherinformation

2 Stanbic IBTC Analysis of financial results for the six months ended 30 June 2014

Group results in brief Income statementanalysis

Group results in briefPerformance highlights

Financial results, ratios and statistics

Half year performance

Summarised income statement

Statement of comprehensive income

Group income statement quarterly analysis

Statement of financial position

Group financial position quarterly analysis

Statement of cash flows

Statement of changes in equity

Business unit reviewSegmental structure for key business units

Segmental income statement

Personal & Business Banking

Corporate & Investment Banking

Wealth

Income statement analysisOverview of group income

Net interest income and margin analysis

Non-interest revenue

Impairment charges

Operating expenses

Taxation

Balance sheet analysisOverview of group consolidated assets

Loans and advances

Loans and advances performance

Deposits and current accounts

Funding and liquidity

Capital managementReturn on ordinary equity

Risk weighted assets

Market and shareholder informationMarket capitalisation and price-to-book ratio

Dividend payment history

Equity and range analysis

Share capital history

Other informationFinancial and other definitions

Contact details

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35

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All results in this booklet are presented on an IFRS (International Financial Reporting Standards) basis.

Contents

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Capital management


Otherinformation





Fitch rating

AAA(nga)(2013: AAA(nga))

Liquidity ratio

76.3% (statutory minimum: 30%)

Price to book

2.4 times (FY 2013: 2.3 times)

Deposit from customersCAGR (1H 2012-1H 2014): 20%

Total income

Profit after tax

Profit after tax/total income

0

400

500

300

200

100

600

246.2

355.4 370.0

416.4

511.8

FY 2012H1 2012 1H 2013 FY 2013 1H 2014

Nbillion

10

Total income

N50,257 million20% up

Gross earnings


Performance highlights

Profit before tax


Profit after tax


Gross loans & advances

N356,910 million(FY 2013: N303,306 million)

Return on average equity

28.9%

(H1 2013: 21.3%)

Deposit liabilities

N511,763 million(FY 2013: N416,352 million)

Cost-to-income ratio

58.1% (H1 2013: 63.2%)

Credit loss ratio

0.8% (H1 2013: 1.6%)

NPL/total loan ratio

4.8% (FY 2013: 4.4%)

Capital adequacy ratio – group

19.8% (FY 2013: 24.5%)

Capital adequacy ratio – bank

13.5% (FY 2013: 18.3%)

Total income and profit after taxCAGR (1H 2011-1H 2014): Total income: 21%

Profit after tax: 60%

Group results in briefPerformance highlights




Statement of comprehensive income

Group income statement quarterly analysis




Statement of changes in equity

3

4

8

10

11

12

13

14

15

16

1H 2011 1H 2012 1H 2013 1H 20140

50,000

40,000

30,000

20,000

10,000

60,000

0.0

30.0

25.0

20.0

15.0

10.0

5.0

35.0

Nbillion

28,207

3,849

31,048

4,993

42,005

10,185

50,257

15,895

5

%

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Change % 1H 2014 1H 2013 FY 2013

Profit before tax Nmillion 50 19,617 13,094 24,617

Banking business Nmillion 48 10,984 6,519 9,474

Personal & Business Banking Nmillion 83 (714) (4,142) (7,696)

Corporate & Transactional Banking Nmillion 10 11,698 10,661 17,170

Investment Banking Nmillion 18 1,559 1,316 4,093

Wealth Nmillion 35 7,074 5,259 12,259

Balance sheet

Total assets Nmillion 19 906,838 818,336 763,046

Loans and advances (net of credit impairments) Nmillion 18 342,214 280,837 289,747

Deposit liabilities Nmillion 23 511,763 370,020 416,352

Key performance indicators

Net interest margin % 5.6 4.9 5.2

Non-interest revenue to total income % 54.2 57.3 56.6

Cost-to-income ratio % 58.1 63.1 68.0

Return on average equity % 28.9 21.3 21.0

Return on average assets % 3.8 2.7 2.9

Basic earnings per share kobo 58 146 93 186

Net asset value per share kobo 19 1,096 918 943

Shareholders' equity Nmillion 109,551 91,759 94,313

Other indicators

Price-to-book (P/B ratio) times 3 2.4 1.7 2.3

Effective tax rate % 19.0 22.4 15.6

Average number of employees (1) 2,053 2,138 2,077

Change % 1H 2014 1H 2013 FY 2013

Balance sheet

Total assets Nmillion 19 859,833 798,344 725,100

Loans and advances (net of credit impairments) Nmillion 18 342,214 280,837 289,749


Selected returns and ratios

Return on average equity % 27.8 17.1 15.0

Return on average assets % 2.5 1.5 1.5

Loan to deposit ratio % 66.7 79.5 72.4

Net interest margin % 5.5 4.7 5.1

Non-performing loan to total loan % 4.8 4.6 4.4


Credit impairment charges Nmillion >100 1,438 2,368 2,667

Credit loss ratio % 0.8 1.6 0.9

Cost-to-income ratio % 65.9 71.7 80.2

Tier 1 capital adequacy % 12.0 13.1 16.6

Total capital adequacy % 13.5 15.4 18.3

Effective taxation rate % 8.8 16.3 6.9

Banking activitiesBusiness unit contribution to profit before tax

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In 1H 2014, the group experienced:

Globally

World economy continues to recover gradually despite the contraction in economic activities experienced in the US and some developed countries in the first quarter of the year due to severe winter weather. The global GDP growth in 2014 is now forecast at 3.1% slightly higher than the estimated 2.9% for 2013.

The Eurozone is improving slowly following the further stimulus package introduced by the European Central Bank including a Targeted Long Term Refinancing Operation (TLTRO) of up to €400 billion, which provides additional monetary supply until 2018.

Improved growth momentum experienced by China albeit slower than expected leading to a slight downward revision in GDP growth from 7.5% to 7.4%.

Africa remains a major investment focus region for developed countries, with East and West African countries recording GDP growth of around 6%. Growth in sub-Saharan Africa is projected to be at 5.8% in 2014. Excluding South Africa, the figure is forecast at 6.8%.

Nigeria

Inflation remained contained at single digit through the first half of 2014, averaging 8.0%.

The exchange rate was under significant pressure in the first quarter of 2014, causing a spike to about N165/USD1 due to huge outflow of funds from the economy by foreign investors. This however, stabilised around N162/USD1 in 2Q 2014.

The capital market experienced slow growth in its performance in 1H 2014 as investors’ reacted to the uncertainties around the financial system in 1Q 2014.

The central bank further tightened the monetary policy measure by increasing the cash reserve requirement on private sector deposits to 15% from 12%.

Share price performance (Jan-June 2014):

Stanbic Share price NSE All Share index Banking Index

0

0.2

0.6

0.4

1.0

0.8

1.4

1.2

02/01/2014

15/01/2014

28/01/2014

10/02/2014

23/02/2014

08/03/2014

21/03/2014

03/04/2014

16/04/2014

29/04/2014

12/05/2014

25/05/2014

07/06/2014

20/06/2014

Financial results, ratios and statistics (continued) Economic and capital market statistics

Change % 1H 2014 1H 2013 FY 2013

Economic indicators

Headline inflation (average) % 8.0 8.4 8.5

External reserves USDbillion (22) 37.5 48.0 43.6

Average official exchange rate N/USD (5) 162.9 155.3 159.2

Market Indicators

NSE All Share Index 17 42,482.5 36,164.3 41,329.2

NSE turnover Nbillion (2) 579.2 591.6 1,025.5

Average daily activity million (10) 426.8 474.3 426.2

Aggregate market capitalisation Ntrillion 21 19.1 15.8 19.1

Equity market capitalisation Ntrillion 23 14.0 11.4 13.2

Stanbic share statistics

Share price

High for the period kobo 53 2,681 1,751 2,135

Low for the period kobo 73 1,900 1,100 1,100

Closing kobo 68 2,600 1,550 2,135

Shares traded

Number of shares traded thousands (42) 180,457 310,970 527,801

Value of shares traded Nmillion (7) 3,993 4,285 8,217

Market capitalisation Nbillion 68 260.0 155.0 213.5

Stanbic’s share price outperformed both the NSE All share Index (NSE ASI) and the Banking Index (BI) in 1H 2014. The group’s share price appreciated by 21.8%, NSE ASI by appreciated by 2.8%, while BI depreciated by 3.3% at the end of first half of 2014.

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Operating environment

The operating environment in the first half of 2014 witnessed further margin compression as the central bank implemented tightening measures by increasing the cash reserve ratio (CRR) on private sector deposits to 15% from 12%, while maintaining CRR on public sector deposit at 75%. The monetary policy rate was maintained at 12%. The capital market started 2014 on a bearish trend after an impressive performance in 2013. The NSE ASI appreciated by 2.8% in 1H 2014 as the market responded negatively to the suspension of the Central bank governor in 1Q 2014. The appointment and subsequent resumption of a new governor in 2Q 2014 saw a gradual return of investors’ confidence. The operating environment also witnessed sustained single digit inflation rate, relatively stable exchange rate supported by the central bank, good yields on investment securities and competition for good quality corporate credits

Notwithstanding these challenges, the group’s financial results continued to show significant growth in revenues and profitability supported by increased clients transaction volumes and activities, improved cost of funding and operational efficiency, steady growth in loan and deposit books and a well positioned trading book taking advantage of favourable market conditions.

Income statement analysisGross earnings increased by 13% to N61.5 billion in 1H 2014, on the back of a 12% growth in interest income and 25% growth in net fees and commissions revenue. Interest income increased to N34.0 billion (1H 2014: N30.4 billion), driven by a sustained growth in loans and advances and good yield on investment securities. Interest expense declined by 11% to N11.0 billion, despite a 23% growth in deposits from customers, reflecting an improvement in the deposit mix. Consequently, net interest income grew by 28% to N23.0 billion, impacting positively on net interest margin which increased to 5.6% from 4.9% in 1H 2013.

Non-interest revenue was up by 13% to N27.3 billion (H1 2013: N24.1 billion), supported by 25% growth in net fees and commission revenue, while trading revenue declined by 6%. Net fees and commission revenue was up from N15.0 billion in 1H 2013 to N18.8 billion, occasioned by increased transactional volumes and activities, as a result of our expanded delivery channels, excellent customer service and steady growth within our wealth business.

The growth in non-interest revenue was however muted by the decline in trading revenue, due to relatively stable foreign exchange market.

Operating expenses grew by 10% to N29.2 billion in 1H 2014 driven by 9% and 11% growth in staff costs and other operating expenses respectively. Staff costs increased in line with inflation as salaries were adjusted for inflation, while growth in other operating expenses was driven majorly by deposit insurance expenses to secure customer deposits with NDIC, contribution to AMCON sinking fund, increase in information technology spend to improve efficiency and better customer experience and increase in marketing and advertising to improve brand awareness. Despite the increase in operating expenses, the cost-to-income ratio improved to 58.1% from 63.2% recorded in 1H 2013.

Credit impairment charges declined by 39% to N1.4 billion, (1H 2013: N2.4 billion), as we continue to improve on the management of our risk assets benefitting from recoveries on previously written off loans and resolution of loans previously classified in the Personal & Business Banking (PBB) business segment.

Overall, profit before tax grew by 50% to N19.6 billion and profit after tax also grew by 56% to N15.9 billion.

Balance sheet analysisThe group’s balance sheet grew by 19% to close at N906.8 billion at the end of H1 2014 (FY 2013: N763.0 billion). Gross loans and advances grew by 18% to N356.9 billion in the first six months of 2014, from N303.3 billion recorded at end of 4Q 2013. The growth in loans and advances is driven by our continued focus on growing our SME and commercial clients in the PBB business segment and on growth in Oil & gas and Power sectors in our CIB segment. We will continue to grow our loan book responsibly by focusing on the right type of customers supported by our growing customer relationships and enhanced by our enlarged delivery channels.

Non-performing loans (NPLs) closed at N17.2 billion at the end of 1H 2014 (FY 2013: N13.4 billion) and represented 4.8% (FY 2013: 4.4%) of total loans. The increase in NPLs is due to a newly classified loan in the Corporate and Investment Banking business segment in response to the trading environment. Coverage ratio in respect of non-performing loans was 86% as at end 1H 2014 (FY 2013: 101%).

Deposit from customers in the 1H 2014 increased by 23% to close at N511.8 billion, from N416.4 billion recorded in FY 2013. The increase in deposit book is on the back of the increased customer base supported by our enlarged delivery channels, increased bouquet of products and efficient service delivery. The ratio of lower priced deposits to total deposits improved to 61% in 1H 2014 from 52% recorded in FY 2013 as a result of our continued efforts at reducing the cost of funds and improving on margins. The deposit from customers contributed 64% of the total liabilities and funded 57% of total assets in 1H 2014.

We are committed to leveraging our expanded delivery channels, our brand and service excellence to increase our share of low cost deposits.

Capital adequacyThe group continued to maintain a healthy capital base as capitalisation ratios remain at strong levels and are above the regulatory requirement. The group’s capital is adequate to support our planned growth opportunities within Nigeria as well as business risks and contingencies.

Group Bank

1H 2014Nmillion

FY 2013Nmillion

1H 2014Nmillion

FY 2013Nmillion

Tier I capital 86,335 86,376 56,328 63,130

Tier II capital 10,064 9,941 7,086 6,408

Total qualifying capital 96,399 96,317 63,414 69,538

Risk weighted assets 486,271 392,888 468,942 380,437

Capital adequacy

Tier I 17.8% 22.0% 12.0% 16.6%

Tier II 2.1% 2.5% 1.5% 1.7%

Total 19.8% 24.5% 13.5% 18.3%

The group’s tier 1 capital adequacy ratio stood at 17.8% (Bank 12.0%), while the total capital adequacy ratio was 19.8% (Bank 13.5%). These ratios are well above the 10% minimum statutory requirement.

The group plans to raise up to N30 billion in corporate bonds in 2H 2014 to support its business growth and expansion.

0

2,000

4,000

6,000

8,000

10,000

12,000

16,000

14,000

Profit after tax 1H 2013

PBB profit after tax growth

CIB profit after tax growth

Wealth profit after tax growth

Profit after tax 1H 2014

10,185

3,748 6781,284 15,896

Contribution to Profit after tax

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Group Bank

Change%

1H 2014Nmillion

1H 2013Nmillion

FY 2013Nmillion

Change%

1H 2014Nmillion

1H 2013Nmillion

FY 2013Nmillion

Gross earnings 13 61,478 54,509 111,226 8 47,669 44,132 87,350

Net interest income 28 22,997 17,937 37,013 28 21,659 16,876 34,802

Interest income 12 34,017 30,382 62,585 11 32,741 29,456 60,529

Interest expense 11 (11,020) (12,445) (25,572) 12 (11,082) (12,580) (25,727)

Non-interest revenue 13 27,260 24,068 48,219 1 14,727 14,617 26,426

Net fees and commission revenue

25 18,764 14,981 32,900 14 6,536 5,731 11,688

Fees and commission revenue

26 18,965 15,040 33,322 16 6,737 5,790 12,083

Fees and commission expense

(>100) (201) (59) (422) (>100) (201) (59) (395)

Trading revenue (6) 8,315 8,811 14,895 (8) 8,086 8,778 14,603

Other revenue (34) 181 276 424 (3) 105 108 135

Total income 20 50,257 42,005 85,232 16 36,386 31,493 61,228

Credit impairment charges 39 (1,438) (2,368) (2,667) 39 (1,438) (2,368) (2,667)

Income after credit impairment charges

23 48,819 39,637 82,565 20 34,948 29,125 58,561

Operating expenses (10) (29,202) (26,543) (57,948) (6) (23,964) (22,606) (49,087)

Staff costs (9) (12,839) (11,797) (23,851) (7) (10,248) (9,619) (19,218)

Other operating expenses (11) (16,363) (14,746) (34,097) (6) (13,716) (12,987) (29,869)

Profit before taxation 50 19,617 13,094 24,617 68 10,984 6,519 9,474

Direct taxation (28) (3,722) (2,909) (3,844) 7 (969) (1,039) 655

Profit for the period 56 15,895 10,185 20,773 83 10,015 5,480 10,129

Profit attributable to:

Non-controlling interests 40 1,295 927 2,163 - - - -

Equity holders of the parent 58 14,600 9,258 18,610 83 10,015 5,480 10,129

Profit for the period 56 15,895 10,185 20,773 83 10,015 5,480 10,129

Group Bank

1H 2014Nmillion

1H 2013Nmillion

FY 2013Nmillion

1H 2014Nmillion

1H 2013Nmillion

FY 2013Nmillion

Profit for the period 15,895 10,185 20,773 10,015 5,480 10,129

Other comprehensive income

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

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

Net change in fair value of available-for-sale financial assets

629 (366) 408 584 (454) 214

Realised fair value adjustments on available-for-sale financial assets reclassified to income statement

(14) (512) (153) (2) (469) (76)

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

Other comprehensive income for the period net of tax

615 (878) 255 582 (923) 138

Total comprehensive income for the period 16,510 9,307 21,028 10,597 4,557 10,267

Total comprehensive income attributable to:

Non-controlling interests 1,312 913 2,129 - - -

Equity holders of the parent 15,198 8,394 18,899 10,597 4,557 10,267

16,510 9,307 21,028 10,597 4,557 10,267

Statement of other comprehensive income

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Group Bank

Change%

1H 2014Nmillion

FY 2013Nmillion

1H 2013Nmillion

Change%

1H 2014Nmillion

FY 2013Nmillion

1H 2013Nmillion

Assets

Cash and cash equivalents 39 167,288 120,312 38,879 37 149,618 109,385 38,879

Trading assets >100 148,080 40,711 160,871 >100 145,313 38,049 157,159

Pledged assets (5) 23,541 24,733 22,265 (5) 23,541 24,733 22,265

Derivative assets 49 2,272 1,526 2,972 49 2,272 1,526 2,972

Financial investments 12 156,666 139,304 142,522 12 138,281 123,457 128,894

Loans and advances (9) 350,994 383,927 375,188 (9) 350,994 383,927 374,200

Loans and advances to banks (91) 8,780 94,180 94,351 (91) 8,780 94,180 93,363

Loans and advances to customers 18 342,214 289,747 280,837 18 342,214 289,747 280,837

Other assets 33 26,298 19,829 47,446 47 21,540 14,634 46,297

Current and deffered tax assets 3 7,928 7,716 5,146 2 7,583 7,441 5,085

Property and equipment (5) 23,771 24,988 23,047 (6) 20,691 21,948 22,593

Total assets 19 906,838 763,046 818,336 19 859,833 725,100 798,344

Equity and liabilities

Equity 15 112,302 97,634 93,831 6 74,521 70,580 64,843

Equity attributable to ordinary shareholders

16 109,551 94,313 91,759 6 74,521 70,580 64,843

Ordinary share capital - 5,000 5,000 5,000 - 1,875 1,875 1,875

Ordinary share premium - 65,450 65,450 65,450 - 42,469 42,469 42,469

Reserves 64 39,101 23,863 21,309 15 30,177 26,236 20,499

Non-controlling interest (17) 2,751 3,321 2,072 - - - -

Liabilities 19 794,536 665,412 724,505 20 785,312 654,520 733,501

Trading liabilities 27 85,194 66,960 81,567 27 85,194 66,960 81,567

Derivative liabilities (25) 812 1,085 383 (25) 812 1,085 383

Deposit and current accounts 18 554,454 468,038 520,994 18 555,961 470,718 534,889

Deposits from banks (17) 42,691 51,686 150,974 (17) 42,691 51,686 150,974

Deposits from customers 23 511,763 416,352 370,020 22 513,270 419,032 383,915

Other borrowings 30 63,575 48,764 49,139 30 63,575 48,764 49,139

Current and deferred tax liabilities (1) 7,743 7,788 5,173 6 2,883 2,723 2,060

Subordinated debt 1 6,494 6,399 6,482 1 6,494 6,399 6,482

Provisions and other liabilities 15 76,264 66,378 60,767 22 70,393 57,871 58,981

Total equity and liabilities 19 906,838 763,046 818,336 19 859,833 725,100 798,344

Change %

2Q 2014Nmillion

1Q 2014Nmillion

1H 2014Nmillion

Gross income 3 31,257 30,221 61,478

Net interest income (4) 11,271 11,726 22,997

Interest income (0) 16,998 17,019 34,017

Interest expense (8) (5,727) (5,293) (11,020)

Non-interest revenue 8 14,175 13,085 27,260

Net fee and commission revenue 10 9,828 8,936 18,764

Fee and commission revenue 9 9,912 9,053 18,965

Fee and commission expense 28 (84) (117) (201)

Trading revenue 3 4,214 4,101 8,315

Other revenue >100 133 48 181

Total income 3 25,446 24,811 50,257

Credit impairment charges 80 (243) (1,195) (1,438)

Income after credit impairment charges 7 25,203 23,616 48,819

Operating expenses 1 (14,555) (14,647) (29,202)

Staff costs (0) (6,421) (6,418) (12,839)

Other operating expenses 1 (8,134) (8,229) (16,363)

Profit before taxation 19 10,648 8,969 19,617

Taxation 20 (1,650) (2,072) (3,722)

Profit for the period 30 8,998 6,897 15,895

Key performance indicator

Net interest margin 5.3 6.1 5.6

Non-interest revenue to total income 55.7 52.7 54.2

Credit loss ratio 0.3 1.5 0.8

Cost-to-income ratio 57.2 59.0 58.1

Return on equity 32.0 26.0 28.9

Return on assets 4.2 3.6 3.8

Non-performing loan to total loan 4.8 4.5 4.8

Summarised group income statement quarterly analysis


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2Q 2014Nmillion

1Q 2014Nmillion

FY 2013Nmillion

Assets

Cash and cash equivalents 167,288 160,946 120,312

Trading assets 148,080 60,418 40,711

Pledged assets 23,541 24,484 24,733

Derivative assets 2,272 2,831 1,526

Financial investments 156,666 131,455 139,304

Loans and advances 350,994 374,813 383,927

Loans and advances to banks 8,780 68,158 94,180

Loans and advances to customers 342,214 306,655 289,747

Other assets 26,298 23,350 19,829

Current and deffered tax assets 7,928 7,420 7,716

Property and equipment 23,771 24,154 24,988

Total assets 906,838 809,871 763,046

Equity and liabilities

Equity 112,302 104,298 97,634

Equity attributable to ordinary shareholders 109,551 100,324 94,313

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

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

Reserves 39,101 29,874 23,863

Non-controlling interest 2,751 3,974 3,321

Liabilities 794,536 705,573 665,412

Trading liabilities 85,194 62,880 66,960

Derivative liabilities 812 1,011 1,085

Deposit and current accounts 554,454 510,906 468,038

Deposits from banks 42,691 58,544 51,686

Deposits from customers 511,763 452,362 416,352

Other borrowings 63,575 65,027 48,764

Current and deferred tax liabilities 7,743 8,968 7,788

Subordinated debt 6,494 6,624 6,399

Provisions and other liabilities 76,264 50,157 66,378

Total equity and liabilities 906,838 809,871 763,046


Group Bank

1H 2014Nmillion

1H 2013Nmillion

1H 2014Nmillion

1H 2013Nmillion

Net cash flows from operating activities 50,603 43,234 45,951 52,329

Cash flows used in operations 31,440 27,899 25,303 36,009

Profit before tax 19,617 13,094 10,984 6,519

Adjusted for: (19,793) (13,714) (18,529) (12,713)

Amortisation of intangible assets - - - -

Credit impairment charges on loans and advances 1,438 2,368 1,438 2,368

Depreciation of property and equipment 1,822 1,753 1,667 1,669

Dividends included in trading revenue and investment income (68) (58) (36) (34)

Equity-settled share-based payments 40 38 19 36

Interest expense 11,020 12,445 11,082 12,580

Interest income (34,017) (30,382) (32,741) (29,456)

Loss/(profit) on sale of property and equipment (28) 122 (30) 124

Increase in income-earning assets (82,170) (116,049) (82,502) (116,057)

Increase in deposits and other liabilities 113,786 144,568 115,350 158,260

Dividends received 68 58 36 34

Interest paid (11,020) (12,445) (11,082) (12,580)

Interest received 34,017 30,382 32,741 29,456

Direct taxation paid (3,902) (2,660) (975) (590)

Net cash flows used in investing activities (17,324) (58,154) (14,622) (58,577)

Capital expenditure on

- property (26) (9) (26) (9)

- equipment, furniture and vehicles (912) (460) (711) (384)

Proceeds from sale of property, equipment, furniture and vehicles 361 5 357 4

(Purchase)/sale of financial investment securities (16,747) (57,690) (14,242) (58,188)

Net cash flows used in financing activities 12,129 (12,370) 8,136 (15,190)

Net increase/(decrease) in other borrowings 14,811 (17,734) 14,811 (17,734)

Proceed from issue subordinated debt - 6,482 - 6,482.00

Net dividends paid (1,882) (1,118) (6,675) (3,938.00)

Effect of exchange rate changes on cash and cash equivalents 768 227 768 227

Net increase in cash and cash equivalents 46,976 (27,063) 40,233 (21,211)

Cash and cash equivalents at beginning of the period 120,312 106,680 109,385 99,840

Cash and cash equivalents at end of the period 167,288 79,617 149,618 78,629

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Ordinaryshare

capitalNmillion

Share premiumNmillion

Merger reserve

Nmillion

Statutory credit risk

reserveNmillion

Available -for-sale

revaluation reserve

Nmillion

Share-based payment

reserveNmillion

Other regulatory

reservesNmillion

Retained earnings Nmillion

Ordinary shareholders’

equityNmillion

Non-controlling

interest Nmillion

Totalequity

Nmillion

Balance at 1 January 2013 5,000 65,450 (19,123) - (68) 362 16,420 15,300 83,341 2,310 85,651

Total comprehensive (loss)/income for the period - - - - (878) - 1,216 8,042 8,380 880 9,260

Profit for the period - - - - - - 1,216 8,042 9,258 927 10,185

Other comprehensive (loss)/income after tax for the period - - - - (878) - - - (878) (47) (925)

Net change in fair value on available-for-sale financial assets - - - - (366) - - - (366) (47) (413)

Realised fair value adjustments on available-for-sale financial assets - - - - (512) - - - (512) - (512)

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

Transactions with shareholders, recorded directly in equity - - - - - 38 - - 38 (1,118) (1,080)

Equity-settled share-based payment transactions - - - - - 38 - - 38 - 38

Dividends paid to equity holders - - - - - - - - - (1,118) (1,118)

Balance at 30 June 2013 5,000 65,450 (19,123) - (946) 400 17,636 23,342 91,759 2,072 93,831

Balance at 1 January 2014 5,000 65,450 (19,123) 769 221 273 18,859 22,864 94,313 3,321 85,651

Total comprehensive income/(loss) for the period 598 - 2,053 12,547 15,198 1,312 16,510

Profit for the period - - - - - - 2,053 12,547 14,600 1,295 15,895

Other comprehensive income/(loss) after tax for the period - - - - 598 - - - 598 17 615

Net change in fair value on available-for-sale financial assets - - - - 612 - - - 612 17 629

Realised fair value adjustments on available-for-sale financial assets - - - - (14) - - - (14) - (14)

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

Statutory credit risk reserve - - - (769) - - - 769 - - -

Transactions with shareholders, recorded directly in equity - - - - - 40 - - 40 (1,882) (1,842)

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

Dividends paid to equity holders - - - - - - - - (1,882) (1,882)

Balance at 30 June 2014 5,000 65,450 (19,123) - 819 313 20,912 36,180 109,551 2,751 100,319

Statement of changes in equity – Group

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Ordinary share capital

Nmillion

Share premiumNmillion

Statutory credit risk

reserveNmillion

Available -for-sale

revaluation reserve

Nmillion

Share-based payment

reserveNmillion

SMIEISreservesNmillion

Statutory reservesNmillion

Retained earnings Nmillion

Ordinary shareholders’

equityNmillion

Balance at 1 January 2013 1,875 42,469 - (129) 362 1,039 13,648 4,924 64,188

Total comprehensive (loss)/income for the period - - - (923) - - 822 4,658 4,557

Profit for the period - - - - - - 822 4,658 5,480

Other comprehensive (loss)/income after tax for the period - - - (923) - - - - (923)

Net change in fair value on available-for-sale financial assets - - - (454) - - - - (454)

Realised fair value adjustments on available-for-sale financial assets - - - (469) - - - - (469)

Transactions with shareholders, recorded directly in equity - - - - 36 - - (3,938) (3,902)

Equity-settled share-based payment transactions - - - - 36 - - - 36

Dividends paid to equity holders - - - - - - - (3,938) (3,938)

Balance at 30 June 2013 1,875 42,469 - (1,052) 398 1,039 14,470 5,644 64,843

Balance at 1 January 2014 1,875 42,469 769 9 266 1,039 15,167 8,986 70,580

Total comprehensive (loss)/income for the period - - - 582 - - 1 502 8,513 10,597

Profit for the period - - - - - - 1,502 8,513 10,015

Other comprehensive (loss)/income after tax for the period - - - 582 - - - - 582

Net change in fair value on available-for-sale financial assets - - - 584 - - - - 584

Realised fair value adjustments on available-for-sale financial assets - - - (2) - - - - (2)

Statutory credit risk reserve - - (769) - - - - 769 -

Transactions with shareholders, recorded directly in equity - - - - 19 - - (6,675) (6,656)

Equity-settled share-based payment transactions - - - - 19 - - - 19

Dividends paid to equity holders - - - - - - - (6,675) (6,675)

Balance at 30 June 2014 1,875 42,469 - 591 285 1,039 16,669 11,593 74,521

Statement of changes in equity – Bank


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Business unit reviewSegmental structure for key business units




Wealth

21

23

24

30

35

Businessunit review

Segmental structure for key business units

Stanbic IBTC Group


Banking and other financial services to individual customers and small-to-medium-sized enterprises.

Corporate & Investment Banking Corporate investment banking services to larger corporates, financial institutions and international counterparties.

Wealth

Investment management in form of non-pension asset management, pension asset management and trusteeship and estate management.

What we offer:Pension fund administration Retirement savings accounts. Gratuity schemes for companies.

Asset management Mutual funds. Portfolio management for

High Net worth individuals.

Trustee services Private trust. Corporate trust.

What we offer:Mortgage lending Residential accomodation loans

to mainly personal market customers.

Instalment sale and finance leases Finance of vehicles for

personal market customers. Finance of vehicles and

equipment in the business market.

Card Products Credit card facilities to

individuals and businesses (Credit card issuing).

Merchant transaction acquiring services (card acquiring).

Transactional products Comprehensive suite of

transactional, savings and investment products. This includes deposit taking activities, electronic banking and debit card facilities.

Lending products Lending products offered to

both personal and business markets.

Bancassurance Short to long term insurance

products to clients through third parties, and financial planning services to clients.

What we offer:Global markets Fixed income and currencies. Commodities. Equities.

Investment banking Advisory. Debt products. Structured finance. Equity capital markets. Debt capital markets. Structured trade and

equity finance.

Transactional products and services Investor services. Transactional banking. Trade finance.

Real estate and principal investment management Real estate finance. Investment in real estate. Principal investment

management.

Coverage and distribution Client facing sales activities

within CIB division.



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1H 2014 1H 2013

Total income N15.2 billion N11.6 billion

Total income increase 32% increase 8%

Total income contribution (%) 30.3 27.5

Cost-to-income ratio (%) 95.9 121.8

Credit loss ratio (%) 1.7 2.9

Loan growth (%) 15.2 6.0

Deposit growth (%) 1.1 10.0

1H 2014 1H 2013





Credit loss ratio (%) 0.1 0.8

Loan growth (%) 19.6 5.0

Deposit growth (%) 42.7 (1.0)

1H 2014 1H 2013





Assets under management increase 9% increase 14%

Retirement savings accounts increase 7% increase 9%

Personal & Business Banking% of group gross income

Wealth% of group gross income

30%

Corporate & Investment Banking% of group gross income

49%

21%

Segmental structure for key business units (continued)



Wealth

Change%

1H 2014Nmillion

1H 2013Nmillion

Change%

1H 2014Nmillion

1H 2013Nmillion

Change%

1H 2014Nmillion

1H 2013Nmillion

Gross income 14 17,836 15,653 7 32,894 30,664 31 10,748 8,192

Interest income 11 13,650 12,315 12 19,356 17,243 5 1,011 959

Interest expense 36 (2,615) (4,086) (4) (8,404) (8,494) - - -

Net interest income 34 11,035 8,229 25 10,952 8,749 5 1,011 959

Non-interest revenue 25 4,186 3,338 (1) 13,337 13,497 35 9,736 7,233

Net fee and commission revenue 28 4,125 3,214 8

4,916 4,545 35 9,722 7,222

Trading revenue - - - (6) 8,315 8,811 - - -

Other revenue (51) 61 124 (25) 106 141 33 15 11

Total income 32 15,221 11,567 9 24,289 22,246 31 10,748 8,192

Credit impairment charges 16

(1,340)

(1,603) 87 (98) (765) - - -

Income after credit impairment charges

39 13,880 9,964 11 24,191 21,824 31 10,748 8,192

Operating expenses (3) (14,594) (14,106) (15) (10,934) (9,504) (25) (3,674) (2,933)

Staff costs (3) (7,309) (7,120) (21) (3,970) (3,287) (12) (1,560) (1,390)

Other operating expenses (4)

(7,285)

(6,986) (12)

(6,964)

(6,217) (37) (2,114)

(1,543)

(Loss)/Profit before tax 83

(714) (4,142) 11

13,257 11,977 35

7,074

5,259

Tax 74 751 (431) 36 (2,293) (1,691) (32) (2,180) (1,649)

Profit after tax >(100) 37 (3,711) 7 10,964 10,286 36 4,894 3,610


0

30,000

25,000

20,000

15,000

10,000

5,000

35,000

40,000

45,000

55,000

50,000

Total income 1H 2013

PBB total income growth

CIB total income growth

Wealth total income growth

Total income 1H 2014

42,005

3,6542,043 2,556 50,258

Contribution to total income



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Personal and Business Banking (PBB) is the retail arm of group’s business. PBB provides services to customers in personal markets, high networth individuals (HNIs) and the commercial, small and medium scale enterprises (SME) business segments. It services customers by providing financial solutions through products and services available on various channels and platforms with a nationwide network of branches, ATMs and bank agents.

The focus of PBB is to provide appropriate, affordable, convenient and accessible financial solutions to customers, through passionate and customer focused employees nationwide. It offers the following products; vehicle and asset finance, unsecured and secured personal and business loans, mortgage loans, a range of trade finance products and various current, savings and investment offerings.

PBB is divided into three business lines for efficient service delivery. The business lines are Personal Banking, Business Banking and Public sector. Personal Banking focuses on banking services to individuals through lifecycle management. The personal banking business meets individual needs as these needs change and cuts across the various segments through to High networth Individuals. Business Banking focuses on two segments - small and medium scale enterprises and commercial, providing them business solutions to support their growing business needs, while Public sector focuses on managing the Group’s relationship with government agencies, ministries and departments.

Financial performancePBB’s gross income increased by 14% to N17.8 billion benefitting from growth in interest income and non-interest revenue. Interest income grew by 11% to N13.7 billion, on the back of a growing loan book supported by increasing number of customers and ability to offer loan products at market rates. Interest expense declined 36% to N2.6 billion.The decline in interest expense is as a result of improvement in PBB’s deposit mix, despite the increase in customer deposits. This positively impacted the net interest income which increased 34% to N11.0 billion.

PBB’s non-interest revenue, comprised primarily net fees and commission income, grew by 25% to N4.2 billion (1H 2013: N3.3 billion) despite the regulatory induced

Personal and Business Banking (PBB)

reduction in transactions fees. The growth in net fee and commission revenue was driven by increased transactional volumes and activities supported by increase in the number of customers. The key contribution to fees and commission are; card transaction fees a function of high ATM uptime, foreign exchange transaction fees and documentary and administrative fees from loans and advances. Total income grew 32% to N15.2 billion on the back of the growth recorded in net interest income and non-interest revenue.

Credit impairment charges declined by 16%, benefitting from better management of the loan book and recoveries made from previously classified loans.

PBB’s operating expenses was up by 3%, due to an increase of 3% and 4% in staff costs and other operating costs respectively. The unit continues to focus on more efficient processes to deliver bespoke services to its customers. The unit recorded a loss before tax of N714 million and profit after tax of N37 million, while its cost-to-income ratio improved to 95.9% from 121.8% in 1H 2013.

PBB gross loans and advances increased by 15% to close 1H 2014 at N153.8 billion (FY 2013: N133.6 billion). When compared to 1H 2013, the loan book increased by 38%. The growth in PBB’s loan book is a testament to the unit’s continued focus to grow the business responsibly by increasing its market share among existing customers, while acquiring new customers. Non-performing loans increased by 7% to N10.7 billion from N9.9 billion recorded in FY 2013. This is a result of our conservative risk management process which led to the classification of some loans during the 1H 2014. Despite the increase in non-performing loans, the ratio of non-performing loans to total loans improved to 6.9% from 7.5% recorded in FY 2013.

Deposit from customers closed at N200.1 billion at the end of the first six months of 2014. This represents a marginal increase of 1% over N197.9 billion recorded in FY 2013 and 11% growth over N180.6 billion achieved in 1H 2013. The continued growth in number of customers supported the growth in deposits, as PBB continues to provide various channels to ensure safe and easy banking services to our customers.

Total operating incomeCAGR (1H 2011-1H 2014): 24%

1H 2011 1H 2012 1H 2013 1H 20140

12,000

14,000

10,000

8,000

6,000

4,000

2,000

16,000 15,221

11,56710,692

8,000

Nmillion

10Net interest income and non-interest revenueCAGR (1H 2011-1H 2014): Net interest income: 22%

Non-interest revenue: 29%

Net interest income Non-interest revenue

1H 2011 1H 2012 1H 2013 1H 20140

8,000

10,000

6,000

4,000

2,000

12,000

Nmillion

6,054

1,946

8,227

2,465

8,229

3,338

11,035

4,186

5


Change % 1H 2014 1H 2013 FY 2013

Net interest income Nmillion 34 11,035 8,229 18,443

Non-interest revenue Nmillion 25 4,186 3,338 6,909

Credit impairment charges Nmillion 16 (1,340) (1,603) (2,344)

Operating expenses Nmillion (3) (14,594) (14,106) (30,703)

Loss before tax Nmillion 83 (714) (4,142) (7,696)

Gross loans & advances Nmillion 15 153,828 111,734 133,550


Cost-to-income % 95.9 121.8 121.1



Loan to deposit % 76.9 61.9 67.5

Non-performing loans to total loans & advances % 6.9 7.8 7.5

Other key business statistics

Business infrastructure

Branch network Number 1 180 179 180

ATMs Number 35 372 276 359



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Quarterly analysis of performance

Change % 2Q 2014 1Q 2014 1H 2014

Net interest income Nmillion (4) 5,418 5,616 11,035


Credit impairment charges Nmillion 49 (452) (889) (1,340)


Loss before tax Nmillion 35 (282) (431) (714)

Net loans and advances Nmillion 11 144,451 129,613 144,451


Cost-to-income % 97.8 94.0 95.9





Business infrastructure

Branch network Number 0 180 180 180

ATMs Number 11 372 361 372

Personal and Business Banking (continued)

1H 2014 1H 2013

Business banking 47%

Personalbanking

53%

Operating income by business unit

Factors impacting the results

Favourable

Net fees and commissions income grew on the back of an increase in transactional volumes and activities.

Deposit mix improved to 59% (1H 2013: 54%) despite a marginal growth in deposit book.

Decline in cost of funding, growth in loan book and ability to re-price loans at market rate contributed to growth in net interest income.

Impairment charges declined due to the resolution of some loans previously classified.

Adverse

Growth in net fees and commission was negatively impacted by regulation that reduced transaction fees.

Business banking 46%

Personalbanking

54%



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Loans & advances

Breakdown of loans and advances to customers Change%

1H 2014Nmillion

FY 2013Nmillion

1H 2013Nmillion

Gross loans and advances 15 153,828 133,550 111,734

Mortgage (11) 7,704 8,667 8,824

Instalment sale and finance leases 7 19,420 18,084 17,581

Overdrafts 26 23,335 18,577 13,754

Term loans 17 103,369 88,223 71,575

Provisions (9) (9,377) (8,608) (7,828)

Specific credit impairment (6) (7,267) (6,879) (6,286)

Portfolio credit impairment (22) (2,110) (1,729) (1,542)

Net loans and advances 16 144,451 124,942 103,906

Breakdown of non-performing loans Change%

1H 2014Nmillion

FY 2013Nmillion

1H 2013Nmillion

Overdrafts (40) 1,409 1,005 993

Term loans 1 6,340 6,377 4,986

Instalment sale and finance leases (7) 2,348 2,195 1,952

Mortgage loans 34 559 418 764

Total (7) 10,656 9,995 8,695

Mortgage lending

Decline in loan book as a result of limited appetite by customers due to high interest rates.

Deterioration in the mortgage asset book as non-performing mortgage loans to total mortgage loans worsened to 7.3% from 4.8% in FY 2013, due to persistent high interest rate environment.

Instalment sale and finance leases Vehicle sales have continued to increase as more customers take advantage of this product to acquire new vehicles, resulting

in growth in interest income.

Stanbic IBTC Bank won “Bank of the Year” on wheels annual award for the 3rd consecutive year during the Nigerian Auto Award 2013, to further confirm its market leadership in vehicle and assets finance business.

The non-performing ratio in instalment sale and finance leases remained flat at 12.1% from FY 2013 despite a 7% growth in the product loan book and non-performing loans.

Personal and Business Banking (continued)

Transactional and lending products

Non-interest revenue grew as a result of increased transactional volumes and activities on the back of continued growth in customer numbers.

Overdraft and term loan books grew as a result of a continued focus on supporting commercial and SME businesses to meet their working capital requirements and aid their expansion.

The ratio of non-performing loans to total loans improved to 6.1% (FY 2013: 6.9%) despite an increase in overdraft and term loans.

Deposit mix improved to 59% (1H 2013: 54%) despite a marginal growth of 1% in deposit book.

Marginal increase in customer deposits due to a one-off reduction in public sector deposits.

Continued focus on service excellence and customer engagement to attract and retain potential and existing customer.

We will continue to focus on increasing customer numbers and deposits by leveraging on our expanded delivery channels.

Change%

1H 2014Nmillion

FY 2013Nmillion

1H 2013Nmillion

Current accounts (1) 97,747 80,964 98,550

Savings deposits 2 19,469 16,948 19,097

Call deposits (27) 6,437 5,213 8,863

Term deposits 7 76,452 77,453 71,388

Total deposits and current accounts 1 200,106 180,578 197,898

Deposit liabilities



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Corporate and Investment Banking (CIB)Corporate and Investment Banking provides wholesale banking services to large local and multinational corporates, institutional and public sector clients in strategic sectors of the economy. CIB offers financial solutions, which includes debt and equity advisory, structured and project finance, trade services, transactional banking and lending, global markets, custody and stockbroking. The unit has four distinct business sub-units through which it delivers client focused financial solutions. The sub-units are Investment banking, Globalmarkets, Transactional products and services and Client coverage.

Investment Banking provides financial advisory, tailored structuring and funding solutions, which include debt and equity capital offerings. The Global Markets deals in equities, fixed income, foreign exchange, money market and other hedging products to satisfy client requirements. Transactional product and services offers standardised or tailored transactional products and services including cash management, trade finance and custody solutions. The client coverage team manages the corporate relationships with our clients.

Financial performanceCIB’s gross revenue increased by 7% to N32.9 billion (1H 2013: N30.7 billion), on the back of a 25% growth in net interest income and 8% growth in net fees and commissions revenue. Interest income grew by 13% to N19.4 billion supported by improved yields in investment securities and a growing loan book. Interest expense remained flat at N8.4 billion in 1H 2014 despite 43% increase in customer deposits. Consequently, net interest income increased by 25% to N11.0 billion. The benefits of our conscious effort to exit matured expensive term deposits and replace them with lower priced deposits is evidenced by the reducing cost of funds and improvement in the deposit mix.

Non-interest revenue declined marginally by 1% to N13.3 billion, as a result of 8% growth in net fees and commissions revenue to N4.9 billion (1H 2013: N4.5 billion), while trading revenue declined by 6% to N8.3 billion. The growth in net fees and commission revenue is as a result of increase in client transactional volumes and activities and closure of good advisory mandates in investment banking business. Total income increased by 9% to N24.3 billion.

Operating expenses increased by 15% to N10.9 billion, on the back of 21% growth in staff cost and 12% growth in other operating expenses. Cost-to-income ratio however declined to 45.0% from 42.7% recorded in 1H 2013. Profit before tax and profit after tax grew by 11% and 7% respectively, to close at N13.3 billion and N11.0 billion.

The unit’s gross loans and advances closed the first six months of 2014 at N203.1 billion, this represents a 20% growth over N169.8 billion recorded in FY 2013 and 11% increase over N183.4 billion in 1H 2013. The growth in gross loans and advances is supported by term loans to the oil and gas and construction sector. The unit’s non-performing loans increased to N6.5 billion due to a newly classified loan due to our conservative risk management procedures. Expectedly, non-performing loans to total loans ratio deteriorated to 3.2% from 2.0% in FY 2013.

Deposit liabilities increased by 43% to N311.7 billion from N218.5 billion in FY 2013. The increase is supported by growing customer relationships and increase in share of clients’ business. Our investment in information technology solutions to serve our customers better is beginning to yield positive results as we provide convenient banking services to our corporate clients.


Net interest income and non-interest revenue CAGR (1H 2011-1H 2014): Net interest income: 14%

Non-interest revenue: 19%

1H 2011 1H 2012 1H 2013 1H20140

12,000

14,000

10,000

8,000

6,000

4,000

2,000

16,000

Nmillion

7,448 7,920 8,278

5,773

8,749

13,497 13,337

5

10,952

Net interest income Non-interest revenue

Performance highlightsChange % 1H 2014 1H 2013 FY 2013


Non-interest revenue Nmillion (1) 13,337 13,497 24,599

Credit impairment charges Nmillion 87 (98) (765) (323)



Gross loans & advances Nmillion 20 203,082 183,391 169,756


Cost-to-income % 45.0 43.6 50.6



Loan to deposit % 65.2 96.8 77.7



Investor services

Assets under custody Nbillion (18) 2,815 2,739 2,887

1H 2011 1H 2012 1H 2013 1H 20140

20,000

25,000

15,000

10,000

5,000

30,000

15,368 14,051

22,246

24,289

10



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Quarterly analysis of performance

Change % 2Q 2014 1Q 2014 1H 2014


Non-interest revenue Nmillion (3) 6,555 6,782 13,337

Credit impairment charges Nmillion >100 209 (306) (98)

Operating expenses Nmillion 7 (5,190) (5,744) (10,934)


Net loans and advances Nmillion 12 197,762 177,042 197,762


Cost-to-income % 42.7 47.3 45.0


Credit loss ratio % (0.4) 0.7 0.1



Investor services

Assets under custody Nbillion (20) 2,815 2,243 2,815

Corporate and Investment Banking (continued)

1H 20131H 2014

Total operating income by business segment

Investment banking 20%

Global markets 41%

Transactional products and services

39%

Investment banking 23%

Global markets 38%


39%


Favourable

Net interest income growth was supported by decline in cost of funding and growth in loan book.

Growth in income from investments due to good yields.

Revenue growth from investment banking business on the back of execution of good deals including a landmark transaction.

Increase in net fees and commissions revenue due to a growth in transaction volumes and activities.

Adverse

Slow growth in capital market performance, due to the market’s reaction to uncertainties in the financial system in 1Q 2014, impacted negatively on revenue from stockbroking business.

The stiff competition for good quality corporate credits impacted negatively on our ability to re-price our corporate loan book in line with market realities.

Global markets

Interest income from interbank placements benefitted from the fluctuations in interbank deposit rates as Stanbic IBTC remained a net placer of funds in the market.

Revenue from foreign exchange trading increased as a result of growth in volume of client transactions and our ability to take advantage of the volatility in the foreign exchange market.

The capital market witnessed a slow growth in 1H 2014, resulting in a negative impact on revenue from stockbroking business.

Investment banking

Non-interest revenue growth was supported by the execution of good deals, in the oil and gas sector, from a strong deal pipeline.

Term loans book deteriorated in quality due to the classification a new non-performing loan in 2Q 2014.


Net interest income growth was on the back of decline in cost of funds resulting from a significant growth in current account balances.

Decline in custody fees due to slow growth in capital market performance.



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Corporate and Investment Banking (continued)

Loans & advances

Breakdown of loans and advances to customers Change%

1H 2014Nmillion

FY 2013Nmillion

1H 2013Nmillion


Instalment sale and finance lease (15) 7,942 9,303 11,431

Overdrafts 25 18,742 14,949 20,741

Term loans 21 176,398 145,504 151,219

Provisions (7) (5,320) (4,952) (6,350)

Specific credit impairments (57) (3,288) (2,094) (3,557)

Portfolio credit impairments 29 (2,032) (2,858) (2,793)


Breakdown of non-performing loans Change%

1H 2014Nmillion

FY 2013Nmillion

1H 2013Nmillion

Overdrafts 9 190 174 154

Term loans >100 6,024 2,958 4,380

Instalment sale and finance leases 1 284 280 285

Total non-performing loans 90 6,498 3,412 4,819

Growth in term loans as demand for expansion funding increases in the oil and gas sector.

The manufacturing, wholesale and distributive trade sector drove the increase in overdraft facilities as the demand for trade facilities for importation continues to rise.

Strong growth in lower priced deposits as the effort to replace expensive term deposits with cheaper deposits begin to yield positive results.

Improvement in deposit mix resulting in better margins.

Lower priced deposits to total deposit ratio improved to 63%. (FY 2013: 46%)

Change%

1H 2014Nmillion

FY 2013Nmillion

1H 2013Nmillion

Current accounts 79 195,937 99,770 68,461

Call deposits (30) 30,931 44,064 27,777

Term deposits 14 84,790 74,620 93,204


Deposit liabilities

Wealth

Wealth group focuses primarily on pension administration, private non-pension asset management as well as trusteeship and estate planning business. The pension administration is managed through Stanbic IBTC Pension Managers Limited, while the non-pension asset management is managed by Stanbic IBTC Asset Management Limited and trusteeship and estate management is managed by Stanbic IBTC Trustees Limited.

The wealth business model is primarily focused on assisting clients in investing in a variety of asset classes, including fixed income and equities markets to accumulate and preserve wealth.

The Federal Government of Nigeria recently signed into law a new pension act 2014 with the following salient points:

i. Increase in contribution rate from 15% to 18%. Employees will now contribute 8%, while employers will contribute 10%. This would lead to growth in assets under management and enhance monthly pension benefits to retirees.

ii. Pension funds have increased asset classes to invest pension contributions. Pension funds can now invest in infrastructure and real estate development in the country.

iii. The timeline to access benefits in event of loss of job has been reduced to 4 months from 6 months in the 2004 pension act.


Profit before taxCAGR (1H 2011-1H 2014): 40%

The impact of the new pension act on Stanbic IBTC Pension Managers will begin to manifest from 4Q as growth in assets under management will be expected resulting in increased revenue. Financial performanceWealth group’s gross income increased 31% to N10.7 billion from N8.2 billion achieved in 1H 2013, as a result of growth in interest income from money market investments and non-interest revenue. Non-interest revenue, comprising of fees and commissions and other income, was up by 35% to N9.7 billion, majorly from growth in pension funds under management and retirement savings accounts. Assets under management grew by 9% to close at N1.4 trillion, from N1.3 trillion at the end of FY 2013, while the number of Retirement Savings Accounts (RSAs) increased by 7% to 1,304,296 from 1,220,777 recorded in FY 2013. Total income increased by 31% to N10.7 billion.

Operating expenses increased by 25% as a result of increased spending on information technology platform to improve operational efficiency. Despite the increase in operating expenses cost-to-income ratio declined to 34.2% from 35.8% recorded in 1H 2013. Profit before tax was up by 35% to N7.1 billion, while profit after grew by 36% to N4.9 billion.

1H 2011 1H 2012 1H 2013 1H 20140

8,000

10,000

6,000

4,000

2,000

12,000

4,839

6,305

8,192

10,748

Nmillion

10

1H 2011 1H 2012 1H 2013 1H 20140

6,000

7,000

5,000

4,000

3,000

2,000

1,000

8,000

2,5723,296

5,259

7,074

Nmillion

10



37


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Capital management

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Business unitreview


Change % 1H 2014 1H 2013 FY 2013

Net interest income Nmillion 5 1,011 959 1,948




Assets under management Nmillion 9 1,437,938 1,131,328 1,316,690

Retirement savings accounts Number 7 1,304,296 1,152,617 1,220,777

Cost to income ratio % 34.2 35.8 34.3


Quarterly analysis performance

Change % 2Q 2014 1Q 2014 1H 2014

Net interest income Nmillion (17) 457 554 1,011




Assets under management Nmillion 7 1,437,938 1,343,020 1,437,938

Retirement savings accounts Number 2 1,304,296 1,282,440 1,304,296

Cost to income ratio % 35.2 33.1 34.2

Wealth (continued)

1H 2014 1H 2013

Asset management 10%

Pension management 90%

Trustees 0%

Operating income by business segment

Asset management 14%

Pension management 85%

Trustees1%

Assets under management

Retirement savings accountAsset management Pension management


Favourable

Increase in net fees and commission driven by growth in pension clients and related assets under management.

Growth in interest income as a result of good yields on investment securities.

Adverse

Growth in operating expenses muted increase in profit before tax.

1H 2012 FY 2012 1H 2013 FY 2013 1H 20140 0

1,000

1,200

800

600

400

200

1,400

1,000

1,200

800

600

400

200

1,400

Nbillion NO (000)

108.9

723.8

125.0 143.1 159.0

865.9

988.2

1,157.7 1,299.6

5

138.3


Income statement analysis

39


Business unitreview



Capital management

Otherinformation



Income statement

analysis

Income statement analysisOverview of group income

Net interest income and margin analysis

Non-interest revenue

Impairment charges

Operating expenses

Taxation

39

41

43

45

47

49

Overview of group income

Drivers of group income

Gross revenue CAGR (1H 2011-1H 2014): 25%

0

20,000

10,000

40,000

30,000

60,000

50,000

Nmillion

Interestincome

34,017

Interestexpense

11,020

Non-interestrevenue

27,260

CreditImpairment

charges

1,438

Operatingexpenses

29,202

Profit before

taxation

19,617

Taxes

3,722

Profit after

taxation

15,895

1H 2011 1H 2012 1H 2013 1H 20140

50,000

60,000

40,000

30,000

20,000

10,000

70,000

31,247

41,898

54,509

61,478

Nmillion

10 Interest based revenue and non-interest based revenue

Interest based revenue

Non-interest based revenue

1H 2011 1H 2012 1H 2013 1H 20140

30,000

35,000

25,000

20,000

15,000

10,000

5,000

40,000

Nmillion

16,732

27,996 30,382

34,017

14,515 13,902

24,127

27,461

5



41


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Capital management

Otherinformation



Total income growth

Total cost growth

Income statement summary

Change % 1H 2014 1H 2013 FY 2013


Non-interest income Nmillion 13 27,260 24,068 48,219

Credit impairment charges Nmillion (39) (1,438) (2,368) (2,667)



Profit after tax Nmillion 56 15,895 10,185 20,773

Total income contribution by business unit


30%


28%

Corporate & Investment Banking48%


Wealth19%

Wealth22%

1H 2014 1H 2013

Overview of group income (continued) Net interest income and margin analysisNet interest income and net interest margin CAGR (1H 2011-1H 2014): 27%

Composition of interest income

Change 1H 2014 1H 2013

% Nmillion Nmillion

Interest income on investment securities 19 10,812 9,108

Interest income on money market operations 73 2,191 1,269

Interest revenue on loans and advances - 21,014 20,938

Medium term advances/call loans 7 15,069 14,124

Overdrafts 26 2,935 2,324

Home loans (25) 676 903

Instalment sales & finance leases (12) 2,336 2,654

Interest income 12 34,017 30,382

Interest expense 11 11,020 12,445

Savings account 24 226 157

Current accounts (>100) 1,250 238

Call deposits 19 1,100 1,358

Term deposits 26 7,179 9,700

Other interest bearing liabilities (28) 1,265 992

Net interest income 28 22,997 17,937

Breakdown of net interest income

Net interest margin before impairment charges

Net interest margin after impairment charges

Net interest income Loans & advances Placements

Investment securities

1H 2011 1H 2012 1H 2013 1H 20140

35

30

25

20

15

10

5

40

18

24

10

14

35

12

20

10

5

1H 2011 1H 2012 1H 2013 1H 20140 0

15,000

20,000

10,000

5,000

25,000

6.0

7.0

5.0

4.0

3.0

2.0

1.0

8.0

13,866

17,937

22,997

Nmillion %

10

17,230

6.5%

5.5%

6.9%

6.4%

5.5%

4.7%

5.6%

4.9%

1H 2011 1H 2012 1H 2013 1H 20140

60

80

40

20

100

%

10

83%

16%

1%

19%

6%

25%

3%

30%

6%

75% 72% 63%

Total income and profitability CAGR (1H 2011-1H 2014): Total income: 21%

Profit after tax: 60%

Profit after tax/total incomeTotal income

Profit after tax

1H 2011 1H 2012 1H 2013 1H 20140

40,000

50,000

30,000

20,000

10,000

60,000

25.0

30.0

20.0

15.0

10.0

5.0

35.0

Nmillion %

28,207

3,849

31,048

4,993

42,005

10,185

50,257

15,895

5 Income growth Vs. Cost growth



43


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Capital management

Otherinformation



Net interest income and margin analysis (continued)

Factors impacting net interest income

Favourable

Decline in cost of funds, as lower priced deposits accounted 61% of deposits, resulting in increase in net interest income.

Interest income grew on the back of loan growth in the oil and gas, manufacturing and communication sectors.

Ability to improve loan pricing in line with market realities especially in the Personal and Business Banking segment contributed to growth in interest income.

Growth in interest income from interbank placement benefitting from increase in interbank deposits rates.

PBB’s contribution to net interest income increased to 48% in 1H 2014 (1H 2013: 46%).

Adverse

Increased pressure on margins with the further increase in cash reserve requirement by the central bank.

Non-interest revenue CAGR (1H 2011-1H 2014): 24%

Composition of non-interest revenue

Breakdown of non-interest revenue Change%

1H 2014Nmillion

1H 2013Nmillion

Net fee and commission revenue 25 18,764 14,981

Account transaction fees (10) 1,560 1,736

Card based commission 53 902 590

Brokerage and financial advisory fees 47 3,132 2,133

Asset management and custody fees 27 10,843 8,528

Electronic banking >100 183 59

Foreign currency service fees 48 896 606

Documentation and administration fees (8) 467 506

Others (5) 781 823

Trading revenue (6) 8,315 8,811

Foreign exchange 25 4,497 3,612

Interest rates (95) 231 4,418

Credit >100 3,598 776

Equity (>100) (11) 5

Other revenue (34) 181 276

Dividend income 18 68 58

Other non-bank revenue (48) 113 218

Total non-interest revenue 13 27,260 24,068

Non-interest revenue (NIR)

Percentage of total incomeNon-interest revenue Fees and commissions income Other revenue

Trading revenue

1H 2011 1H 2012 1H 2013 1H 20140

20,000

25,000

15,000

10,000

5,000

30,000

0

80

90

70

60

50

40

30

20

10

100

14,341

13,818

24,068

27,260

10

1H 2011 1H 2012 1H 2013 1H 20140

80

90

70

60

50

40

30

20

10

100

%

10

63 80 62 69

35 19 37 30

2 1 1 1

Net interest income by business unit

1H 2014 1H 2013


48%


49%

Personal & Business Banking48%


Wealth5%

Wealth4%



45


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Otherinformation



Non-interest income by business unit

Favourable

Growth in net fees and commissions revenue from wealth business as assets under management continues to grow at a faster rate than the capital market.

High ATM uptime, increased usage of internet banking platform and other e-channels of payment contributed to significantly to growth in non-interest revenue.

Growth in foreign exchange trading revenue was driven by increased customer transaction volume and activities and ability to take advantage of volatility in the foreign exchange market.

The investment banking business contributed to the growth in non-interest revenue by executing good advisory mandates including a landmark deal in the oil and gas sector.

Factors impacting non-interest revenue

Adverse

Growth in net fees and commission revenue was hampered by regulatory induced reduction in transaction fees.

Revenue from stockbroking business was negatively impacted by the slow growth in the capital market performance.

Non-interest revenue (continued) Credit impairment charges

Change%

1H 2014Nmillion

1H 2013Nmillion

Specific credit impairment charges 10 2,365 2,144

Provision for performing loans >(100) (445) 493

Total impairment charges (27) 1,920 2,637

Recoveries 79 (482) (269)

Credit impairment charges (39) 1,438 2,368

Specific impairment

raised and releasedNmillion

General impairment

raised and releasedNmillion

RecoveriesNmillion

TotalNmillion

Mortgage lending 185 (9) (57) 119

Instalment sales and finance leases 17 77 (4) 90

Card 24 (1) - 23

Corporate lending 1,193 (826) (270) 97

Other loans and advance 946 314 (151) 1,109

Total impairment charges 2,365 (445) (482) 1,438

Impairment charges and credit loss ratio

Movement in credit impairment charges

Credit impairments by product

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

(1.5)

(1.0)

(0.5)

0.0

0.5

1.0

1.5

2.0

2.5

1H 2011 1H 2012 1H 2013 1H 2014

1,000

1,500

500

0

(500)

(1,000)

2,000

Nmillion

1,300

745

1,020

270

1,875 1,883

493

(445)

5

1H 2014 1H 2013


14%


15%



Wealth36%

Wealth30%



47


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Otherinformation



Change %

1H 2014Nmillion

1H 2013Nmillion

Corporate & Investment Banking (87) 98 765

Personal & Business Banking (16) 1,340 1,603

Credit impairment charges (39) 1,438 2,368

Credit impairment charges by business unit

Credit impairment charges (continued) Operating expenses

Operating expenses and cost-to-income ratio Composition of operation costs

Change%

1H 2014Nmillion

1H 2013Nmillion

Staff costs (9) 12,839 11,797

Other operating expenses: (11) 16,363 14,746

Communication 1 339 342

Depreciation (4) 1,822 1,753

Information technology (61) 2,519 1,563

Marketing and advertising (4) 1,026 986

Premises and maintenance 12 1,613 1,826

AMCON Fund and NDIC deposit insurance (16) 3,121 2,683

Travel and transportation (1) 602 598

Professional fees (30) 2,663 2,051

Others 10 2,658 2,944

Total operating expenses (10) 29,202 26,543

Breakdown of operating expenses

Average headcount of business unit

Cost-to-income ratioOperating expenses Staff costs Other operating expenses

Depreciation

1H 2011 1H 2012 1H 2013 1H 20140

25,000

30,000

20,000

15,000

10,000

5,000

35,000

80

90

70

60

50

40

30

20

10

0

100

18.9

20,768

23,640

26,51229,202

34.4

Nmillion

10

1H 2011 1H 2012 1H 2013 1H 20140%

80%

60%

40%

20%

100%

18.9

41.0 40.9

34.4

10

44%

6%

44%

7%

50%49%

43%

7%

49%

44%

12%

44%

Change %

1H 2014 Nmillion

FY 2013Nmillion

1H 2013Nmillion

Personal & Business Banking 3 966 998 1,075

Corporate & Investment Banking (3) 156 152 181

Wealth (2) 344 336 341

Credit 2 82 84 71

Other support functions - 505 507 470

Average number of employee 1 2,053 2,077 2,138



49


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Capital management

Otherinformation



Staff cost and headcount

Staff cost was impacted by:

Annual adjustment of staff salaries in line with market realities.

Growth in number of direct sales agents for branches.

Other operating expenses

Other operating cost was impacted by:

Growth in deposit insurance expenses due to increase in customer deposits.

Increase in rate of AMCON fund contribution to 0.5% from 0.3% of total assets impacting negatively on our expenses as our total assets continues to grow.

Significant increase in information technology expenses to improve our transactional service platform and enhance business efficiency.

Growth in marketing and advertising expenses

due to brand awareness campaign.

Operating expenses (continued)

Operating expenses by business unit





Wealth11%

Wealth12%

1H 2014 1H 2013

Taxation

Taxation charge and effective tax rate

The effective tax rate declined to 19.0% (1H 2013: 22.4%) notwithstanding an increase in tax payable, as revenue from tax exempt sources increased in 1H 2014.

Change %

1H 2014 Nmillion

1H 2013Nmillion

FY 2013Nmillion

Direct taxation

Normal taxation 39 3,949 2,835 6,326

Deferred tax >(100) (227) 74 (2,482)

Total taxation 28 3,722 2,909 3,844

Breakdown of taxation

Effective tax rateTaxation

1H 2011 1H 2012 1H 2013 1H 20140

3000

3500

2500

2000

1500

1000

500

4000

0

25.0

20.0

15.0

10.0

5.0

30.0

1,478

862

2,909

3,722

Nbillion

10

%

50 Stanbic IBTC Analysis of financial results for the six months ended 30 June 2014 51


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Capital management

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Balance sheetanalysis


Balance sheet

analysis

Balance sheet analysisOverview of group consolidated assets

Loans and advances



Funding and liquidity

52

54

56

60

62



53


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Capital management

Otherinformation



Overview of group consolidated assets

Asset mix Breakdown of total assets

Cash and loans to banksTrading & derivative assets

Loans & advances to customersFinancial investments

Other assetsOther assets

Trading, derivatives & pledged assetsPledged assets

Cash and loans to banks

Financial investmentsLoans & advances to customers

Property & equipmentProperty & equipment

Overview of group consolidated assets

Return on assets

Pre-tax return on average assets After-tax return on average assets

The group’s balance sheet closed at N906.8 billion at the end of first six month of 2014. This represents a 19% growth over N763.0 billion recorded in FY 2013. On quarter-on-quarter basis, the group’s balance sheet increased by 12% between 1Q 2014 and 2Q 2014. The total assets growth was aided by increase in deposit liabilities which funded the growth in loans and advances and liquid assets. Net loans and advances to customers represented 38% of total assets.

The group’s after tax return on average assets improved to 3.8% (FY 2013: 2.9%), on the back of a higher growth rate in profit after tax than growth in average total assets.

0

1,000,000

N Million

900,000

800,000

700,000

600,000

500,000

400,000

300,000

200,000

100,000

Total Assets Cash & loans to bank

Trading andderivative assets

Pledged assets

906,838 176,068

150,352

23,541 156,666

342,214

34,226 23,771

Financialinvestments

Loans &advances to customers

Other assets Property& equipment

0

70

80

90

60

50

40

30

20

10

100

1H 12

5%

47%

12%

4%

14%

15%

FY 12

4%4%

39%

13%

4%

17%

19%

1H 13

3%6%

34%

17%

3%

20%

16%

FY 13

3%4%

38%

18%

3%6%

28%

1H 14

3%3%

38%

17%

3%

17%

19%

3%

%

1H 2014 FY 20130

700

800

600

500

400

300

200

100

1000

900

Nbillion

10

176.1

173.9

342.2

214.5

67.0

289.7

139.3

27.525.0156.7

26.331.7

1H 2012 FY 2012 1H 2013 FY 2013 1H 20140

4.0

3.5

4.5

3.0

2.5

2.0

1.5

1.0

0.5

5.0

2.2%

1.8%

1.9%

1.6%

2.7%

3.5% 3.4%

2.9%

4.7%

3.8%

10

%



55


Business unitreview



Capital management

Otherinformation



Loans and advances

Gross loans and advances Composition of gross loans and advances

Breakdown of loans and advances to customers

Change%

1H 2014Nmillion

FY 2013Nmillion

1H 2013Nmillion


Home loans (11) 7,704 8,667 8,824

Instalment sales and finance leases 1 27,362 27,012 29,012

Overdrafts 26 42,077 33,526 34,495

Term loans 20 279,767 234,101 222,794

Provisions 8 (14,697) (13,559) (14,288)

Specific credit impairments 18 (10,554) (8,972) (9,953)

Portfolio credit impairments (10) (4,142) (4,587) (4,335)


Term loans78%

Mortgage2%

Overdrafts12%

Instalment sales & finance leases

8%

Breakdown of loans and advances by industry

1H 2014 1H 2013

Manufacturing19%

Manufacturing18%

Construction & real estate6%

Construction & real estate5%

Agriculture4%

Agriculture4%

Consumer credit19%

Consumer credit19%

Finance & insurance5%

Finance & insurance4%

Electricity & other utilities 3%

Electricity & other utilities 4%

Transportation & communication

13%

Transportation & communication

4%

Government1%

Government1%

General commerce

13%

General commerce

23%

Oil, gas & mining

17%

Oil, gas & mining

18%

Industry Change %

1H 2014Nmillion

FY 2013Nmillion

Agriculture 17 14,915 12,703

Construction and real estate 49 22,727 15,294

Electricity & other utilities 3 11,037 10,671

Finance & Insurance 39 18,071 13,017

Consumer credit 18 65,786 55,853

Manufacturing 18 65,937 55,741

Oil, gas & mining 12 62,210 55,568

General commerce (33) 47,488 70,967

Transportation & communication >100 46,675 11,318

Government (5) 2,064 2,174

Gross loans and advances 18 356,910 303,306

Loans and advances

Continued growth in loan book aided by increase in number of customers and increased points of representation.

Continued focus on lending to commercial and SME businesses.

Increase in corporate loans and advances despite stiff competition for good quality corporate credits.

Potential increase in annuity income as medium to long term loans accounted for 78% of total loan portfolio.

We continue to rebalance our loan portfolio taking into consideration sector concentrations. The transport and communications

sector increased to 13% (1H 2013: 4%) of our loan portfolio, while general commerce sector declined to 13% from 23% in 1H 2013.

The high interest rate environment continues to hinder growth in the loan portfolio as customers’ appetite to borrow remains low.

Breakdown of loans and advances by business unit

PBBNmillion

CIBNmillion

TotalNmillion

Overdrafts 23,335 18,742 42,077

Term loans 103,369 176,398 279,767

Instalment sales and finance leases 19,420 7,942 27,362

Home loans 7,704 - 7,704

Total loans and advances 153,828 203,082 356,910

0

50.0

100.0

150.0

200.0

250.0

300.0

400.0

350.0

1H 2012 FY 2012 1H2013 FY 2013

Nbillion

1H 2014

283.5 279.5 295.1 303.3

356.9



57


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Otherinformation




NPL and coverage ratioNon-performing loans

Breakdown of non-performing loans and advances by business unit

Non-performing loans by product

Change%

1H 2014Nmillion

FY 2013Nmillion

Overdrafts 36 1,599 1,179

Term loans 32 12,364 9,335

Instalment sales and finance leases 6 2,632 2,475

Home loans 34 559 418

Total loans and advances 28 17,154 13,407

PBBNmillion

CIBNmillion

TotalNmillion

Overdrafts 1,409 190 1,599

Term loans 6,340 6,024 12,364

Instalment sales and finance leases 2,348 284 2,632

Home loans 559 - 559

Total loans and advances 10,656 6,498 17,154

NPL/total loans Provision adequacyNon-performing loans Non-performing loans

Non-performing loans by industry

Change %

1H 2014Nmillion

FY 2013 Nmillion

Agriculture (5) 2,237 2,359

Construction and real estate 15 1,902 1,651

Electricity and other utilities >100 3,214 -

Mortgage 34 559 418

Consumer credit (22) 2,266 2,892

Manufacturing 4 1,390 1,333

Oil, gas & mining >100 971 352

General commerce (21) 2,649 3,356

Transportation and communication 88 1,966 1,046

Total non-performing loans 28 17,154 13,407

Non-performing loans worsened to N17.2 billion in 1H 2014 from N13.4 billion in FY 2013 due to a newly classified loan in the CIB business, resulting to non-performing loans to total loans ratio deteriorating to 4.8% from 4.4% at the end of FY 2013.

0

5.0

10.0

15.0

20.0

25.0

0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

9.0

8.0

1H 2012 FY 2012 1H 2013 1H 2014FY 2013

23.4

Nbillion %

10

8.3%

14.3

Non-performing loans

NPL/total loans

5.1%

13.5

4.6%

13.4 17.2

4.4%

4.8%

01H 2012 FY 2012 1H 2013 1H 2014FY 2013

10

47.0%

Non-performing loans

NPL/total loans

91.6% 105.7%101.1%

85.7%

8.3%

5.1% 4.6% 4.4% 4.8%



59


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Otherinformation



Asset quality

Performing loans Non-performing loans

Neither past due nor specifically impaired

Not specifically impaired

Specifically impaired loans

Total Loans and Advances

to Customers

Balance sheet

impairments for

performing loans

Normal monitoring

Close monitoring

Early arrears

Non- performing

Sub-standard Doubtful Loss Total

Securities and expected recoveries on

specifically impaired

loans

Net after securities

and expected recoveries on

specifically impaired

loans

Balance sheet impairments

for non- performing specifically

impaired loans

Gross specific impairment

coverage

Total non- performing

loans

Non- performing

loans

June 2014 Nmillion Nmillion Nmillion Nmillion Nmillion Nmillion Nmillion Nmillion Nmillion Nmillion Nmillion Nmillion Nmillion % Nmillion %


153,828 2,110 116,789 3,545 22,839 - 3,865 3,652 3,138 10,655 3,388 7,267 7,267 68 10,655 6.9

Mortgage loans 7,704 74 5,268 218 1 659 - 244 69 246 559 123 436 436 78 559 7.3

Instalment sale and finance leases

19,420 521 12,346 426 4,300 - 2,009 325 14 2,348 1,090 1,258 1,258 54 2,348 12.1

Card debtors 973 2 686 - 187 - 45 17 37 99 6 93 93 94 99 10.2

Other loans and advances

125,731 1,513 98,489 2901 16,693 - 1,567 3,241 2,841 7,649 2,169 5,480 5,480 72 7,649 6.1


203,082 2,032 194,417 2,168 - - 3,214 3,284 - 6,498 3,211 3,287 3,287 51 6,498 3.2

Corporate loans 203,082 2,032 194,417 2,168 - - 3,214 3,284 - 6,498 3,211 3,287 3,287 51 6,498 3.2

Gross loans and advances

356,910 4,142 311,206 5,713 22,839 - 7,079 6,936 3,138 17,153 6,599 10,554 10,554 62 17,153 4.8

Asset quality



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Deposit liabilities CAGR (1H 2011-1H 2014): 20%

Deposit mix

Breakdown of total deposits Change%

1H 2014Nmillion

FY 2013Nmillion

1H 2013Nmillion

Deposits from banks (17) 42,691 51,686 150,974

Deposits from banks (17) 42,691 51,686 150,974

Deposits from customers 23 511,763 416,352 370,020


Call deposits (29) 37,368 52,927 32,990

Savings accounts 2 19,469 19,097 16,948

Term deposits 10 161,242 146,008 170,657


Deposit breakdown by business unit Change%

1H 2014Nmillion

FY 2013Nmillion

1H 2013Nmillion

Pesonal & Business Banking 1 200 106 197 898 180 578

Current accounts (1) 97,747 98,550 80,964

Savings deposits 4 19,469 19,097 16,948

Call deposits (31) 6,437 8,863 5,213

Term deposits 7 76,452 71,388 77,453

Corporate & Investment Banking 43 311,657 218,454 189,442


Call deposits (1) 30,931 44,064 27,777

Term deposits 20 84,790 74,620 93,204


Term deposits

Call deposits

Savings accounts

Current accounts

Deposit liabilities

Strong growth in deposits by 23%, a function of our expanded delivery channels and increase in number of customers.

Demand deposits grew by 48% and accounted for 57% of total deposits, benefitting from our conscious effort to exit expensive term deposits and replacing them with lower priced deposits.

Decline in funding cost as a result of a shift in focus to demand and savings deposits as against raising term deposits.

0

100

200

300

400

500

600

1H 2012 FY 2012 1H 2013 1H 2014FY 2013

246.2

Nbillion

10

355.4370.0

416.4

511.8

1H 2012 FY 2012 1H 2013 FY 2013 1H 20140

80

60

40

20

100

10

43%

11%

41%

39%

6%

5%

4%

51%

40%

9%

5%

46%

48%

13%

4%

35%

57%

7%4%

32%

%



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10Funding and liquidity

Balance sheet funding

Funding mix

Assets Liabilities

1H 2014 FY 2013

Equity 12%

Borrowings 8%

Other liabilities

9%

Trading liabilities

9%

Deposits from banks

5%Deposits from customers 56%

Equity 13%

Borrowings 6%

Other liabilities

11%

Trading liabilities

9%

Deposits from banks

7%

Deposits from customers 55%

1122632

84157

70

342

43

172512

176

86

Property & equipment and intangible assets

EquityOther assets

Other liabilitiesFinancial investments

Other borrowings

Loans & advances to customers

Deposits from banks

Trading, derivatives and pledged assets

Deposits from customers

Cash and loans to banks

Trading & derivative liabilities

Nbillion

Liquidity market overview

The group’s liquidity risk management framework is designed to measure and manage the liquidity position at various levels of consolidation so that payment obligations could be met at all times, under both normal and considerably stressed conditions. Under the delegated authority of the board, the Asset and Liability Committee (ALCO) sets liquidity risk policies in accordance with regulatory requirements and international best practice.

The Central bank further tightened its monetary policy measures by increasing cash reserve ratio requirement (CRR) on private sector deposits to 15% from 12%, while maintaining CRR on public sector deposits at 75%, monetary policy ratio at 12% and liquidity ratio remained 30%.

The group is planning to raise up to N30 billion through a corporate bond in 2H 2014 to support its business growth and expansion.

Liquidity ratio computation Group1H 2014Nmillion

GroupFY 2013Nmillion

Bank1H 2014Nmillion

BankFY 2013Nmillion

Specified liquid assets

Cash 11,115 13,814 11,115 12,965

Balance with CBN (net DR/CR balance, and excluding CRR) 8,411 98,427 8,181 83,922

Net balance held with banks within Nigeria 9 9 9 9

Treasury Bills 273,158 168,445 261,694 171,509

Net Money At Call with Other Banks 5,029 - 5,029 -

Federal Government of Nigeria bonds 5,401 9,357 1,056 5,186

Stabilisation Securities 1,085 1,085 1,085 1,085

Total Asset (A) 304,209 291,138 288,170 274,677

Current liabilities

Adjusted deposit liabilities 398,855 326,888 400,383 312,695

Total liabilities (B) 398,855 326,888 400,383 312,695

Liquidity ratio A/B*100 76.3% 89.1% 72.0% 87.8%



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Limits are set to restrict the cumulative liquidity mismatch between expected inflows and outflows of funds in different time buckets.

Behavioural profiling is applied to assets, liabilities and off balance sheet commitments with an indeterminable maturity or drawdown period, as well as to certain liquid assets.

Behavioural profiling assigns probable maturities based on actual customer behaviour. This process is used to identify additional sources of structural liquidity in the form of liquid assets and core deposits, such as current and savings accounts that although repayable on demand or at short notice, exhibit stable behaviour.

The behaviourally adjusted cumulative liquidity mismatch remains well within liquidity risk appetite.

Structural liquidity requirements

Group unencumbered surplus liquidity Change%

1H 2014Nmillion

FY 2013Nmillion

Marketable assets 41 245,773 174,094

Short-term foreign currency placements >100 35,586 6,139

Total unencumbered marketable assets 56 281,359 180,234

Other readily accessible liquidity (14) 72,935 84,997

Total unencumbered surplus liquidity 34 354,294 265,231

Funding and liquidity (continued)

Liquidity buffer

Portfolios of highly liquid marketable securities, over and above prudential requirements, are maintained as protection against unexpected disruptions in cash flows. These holdings are considered in the context of internal stress tests and discounts assumed on certain securities in a possible sale.

The amount of contingent liquidity required the group’s liquidity risk standard is influenced by the nature of the depositor, and the contractual terms of the deposit as well as the prevailing and anticipated regulation.

The surplus liquidity holdings are managed taking into account liquidity stress testing results and CBN regulation. The unencumbered surplus liquidity amounted to N354.3 billion as at 30 June 2014.

Diversified funding base

The group’s funding strategy is derived from the projected balance sheet growth which includes consideration of Personal & Business Banking and Corporate & Investment Banking asset classes, capital requirements, the maturity profile of existing funding and anticipated changes in the retail deposit base. Funding requirements and initiatives are assessed in accordance with the group asset and liability committee requirements for diversification, tenor and currency exposure, as well as the availability and pricing of alternative liquidity sources.

Concentration risk limits are used within the group to ensure that funding diversification is maintained across products, sectors, geographic regions and counterparties.

Primary sources of funding are in the form of deposits across a spectrum of retail and wholesale clients, as well as long term capital market funding. Deposit from customers funded 56% of total assets in 1H 2014.

Medium to long term funding form Development and Financial institutions form part of our diversified funding base. Funding from this source accounted for 8% of total liabilities and increased to N63.6 billion from N48.8 billion at the end of 2013.

Liquidity stress testing and scenario analysis

Anticipated on- and-off balance sheet cash flows 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.

The outcomes of the stress scenarios are considered by asset and liability management committees on a monthly basis, and inform minimum liquid asset buffer requirements and contingency funding plans.


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Capitalmanagement


Capital managementReturn on ordinary equity

Risk weighted assets

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Return on ordinary equity

Shareholders’ funds

Shareholders’ fund

Shareholders’ equity increased by 16% to N109.6 billion in 1H 2014 (FY 2012: N94.3 billion). The pre-tax and post-tax return on average equity increased significantly to 37.7% and 28.9% respectively on an annualized basis. This performance is better than pre-tax return on average equity of 30.0% and post-tax return on equity of 21.3% achieved in 1H 2013. The significant increase in profit before and after tax aided the significant increase in return on average equity.

0

70.0

80.0

60.0

50.0

40.0

30.0

20.0

10.0

90.0

110.0

100.0

Nbillion

10

1H 2014

109.6

1H 2012

85.1

FY 2012

83.3

1H 2013

91.8

FY 2013

94.3

Average shareholders’ fund and return on equity

Shareholders’ fund (average) ROaE (PAT) ROaE (PBT)

0 0

10,000

20,000

40,000

30,000

50,000

70,000

60,000

90,000

110,000

80,000

100,000

5.0

10.0

20.0

15.0

30.0

25.0

35.0

40.0

%Nmillion

10

ROaE (PAT) ROaE (PAT)

1H 2012

83,191

14.8%

10.6%

FY 2012

81,604

14.4%

10.9%

1H 2013

88,446

30.0%

21.3%

FY 2013

88,827

27.7%

21.0%

1H 2014

101,932

37.7%

28.9%

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Market and shareholder information


Capital management

Market and shareholder informationMarket capitalisation and price-to-book ratio



Share capital history

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70

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Capital adequacy computation Group1H 2014Nmillion

GroupFY 2013Nmillion

Bank1H 2014Nmillion

BankFY 2013Nmillion

Tier I capital 86,335 86,376 56,328 63,130

Tier II capital 10,064 9,941 7,086 6,408

Total qualifying capital 96,399 96,317 63,414 69,538

Risk weighted assets 486,271 392,888 468,942 380,437

Capital adequacy

Tier I 17.8% 22.0% 12.0% 16.6%

Tier II 2.1% 2.5% 1.5% 1.7%

Total 19.8% 24.5% 13.5% 18.3%

Risk - weighted assets

Tier 1 capital adequacy

Total capital adequacy

Statutory minimum

Total assets and risk weighted assets Capital adequacy ratio

1H 2012 FY 2012 1H 2013 FY 2013 1H 2014

Total assets 577,442 676,819 818,336 763,046 906,838

Risk-weighted assets

361,770 377,993 433,865 392,888 486,271

% risk weighted assets to total assets

62.7% 55.8% 53.0% 51.5% 53.6%

The group’s capital adequacy ratios remain at strong levels and are well above the regulatory requirement. The tier 1 capital adequacy ratio stood at 17.8% (Bank 12.0%), while the total capital adequacy ratio was 19.8% (Bank 13.5%). These ratios are well above the 10% minimum statutory requirement. The group’s capital is deemed adequate to support our planned growth opportunities within Nigeria as well as business risks and contingencies.

0

700,000

800,000

600,000

500,000

400,000

300,000

200,000

100,000

1,000,000

900,000

Nmillion

5

0

10

20

30

40

50

60

70

%

1H 2012 FY 2012 1H 2013 FY 2013 1H 20140

25.0

30.0

20.0

15.0

10.0

5.0

35.0

%

21.3 21.920.7

22.3

17.8

20.822.0

24.5

17.819.8

5



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

Net asset value per share Price-to-book


The shareholding pattern of the Group as at 30 June 2014

Share range No. of shareholders

% shareholders

No. of holding

% holdings

1 - 1,000 39,038 39.5 21,264,848 0.2

1001 - 5,000 38,129 38.7 79,222,018 0.8

5,001 - 10,000 10,302 10.5 64,075,369 0.6

10,001 - 50,000 8,698 8.8 164,680,130 1.7

50,001 - 100,000 1,310 1.3 82,422,953 0.8

100,001 - 500,000 962 1.0 175,497,653 1.8

500,001 - 1,000,000 125 0.1 79,520,005 0.8

1,000,001 - 5,000,000 94 0.1 197,699,050 2.0

5,000,001 - 10,000,000 16 0.0 113,142,753 1.1

10,000,001 - 50,000,000 41 0.0 824,580,918 8.2

50,000,001 - 10,000,000,000 26 0.0 8,197,894,303 82.0

Grand Total 98,741 100.0 10,000,000,000 100.0

Significant shareholding of 5% and above

ShareholderNo of shares held

30 June 2014Shareholding

%No of shares held

31 Dec 2013 Shareholding

%

Stanbic Africa Holdings Limited 5,318,957,354 53.2 5,316,268,150 53.2

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

Share exchange history

Authorised (N000) Issued and fully paid up

Year increase cumulative increase cumulative Consideration

2012 - 500 - 125 share exchange

2012 9,999,500 10,000,000 10,000,000 10,000,000 share exchange


Period ended Total amount paidNmillion

Dividend paid per shareKobo

December 31, 2014

Interim proposed: 11,000 110

December 31, 2013

Interim: 1,000 10

Final: 7,000 70

December 31, 2012

Final: 8,500 60

Stanbic IBTC’s shares outperformed both the NSE All Share Index and the Banking Industry index in 1H 2014. The group’s price-to-book ratio of 2.4 times, evidenced that investor confidence in the ability of the group to deliver value and better future returns. As at year end, the group ranked 11th in market capitalisation amongst the 190 listed equities on the Nigerian Stock Exchange.

Change % 1H 2014 FY 2013

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

Net asset value Nmillion 16 109,551 94,313

Net asset value per share kobo 16 1,096 943

Share price at the end of the period kobo 22 2,600 2,135

Market capitalisation at end of the period Nbillion 22 260.0 213.5

Price-to-book at end of the period times 5 2.4 2.3

1H 2012 FY 2012 1H 2013 FY 2013 1H 20140

200

150

100

50

300

250

120 110

155

213

260

Nbillion

10

1H 2012 FY 2012 1H 2013 FY 2013 1H 20140 0

800

600

400

200

1,200 2.5

2.0

1.5

1.0

0.5

1,000

Kobo Times

10

454 833 918 943 1,096

1.4

1.31.7

2.3 2.4


Other information

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Other informationFinancial and other definitions

Contact details

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Otherinformation

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

CAGR (%) Compound annual growth rate.

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

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

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

Dividend per share (kobo) Total dividends to ordinary shareholders including dividends and scrip distributions declared per share in respect of the period.

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

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

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

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

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

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

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

Profit attributable to ordinary shareholders Profit for the period attributable to ordinary shareholders, calculated was profit for the period less minority interests.

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

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

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

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

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

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

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

Financial and other definitions

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Contact details

Registered address:

Stanbic IBTC Holdings PLCI.B.T.C. PlaceWalter Carrington CrescentP. O. Box 71707Victoria IslandLagosNigeria

E: [email protected]

Henry AnahHead: Investor Relations

T: +234 1 4228742 E: [email protected]

Arthur Oginga Chief Financial Officer

T: +234 1 4228746E: [email protected]

Chidi OkezieCompany Secretary

T: +234 1 4228695E: [email protected]

Stanbic IBTC Holdings PLC RC1018051

www.stanbicibtc.comDesigned and produced by Creative Interpartners, LondonEmail: [email protected]

Photography: Centaur Photographers

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