Stanbic Holdings PLC FY’22 earnings results were higher than our expectations. The lender posted a 25.69% y/y climb in PAT and a 25.70% growth in EPS to KES 9.06Bn and KES 22.92/share respectively driven by a 31.81% y/y growth in net interest income and a 23.74% y/y growth in non-interest income. Trailing ROaE & ROaA improved to 15.66% & 2.84% respectively in FY’22 as NIMs remained adequate at 5.89. The board of directors recommended a KES 12.60 Dividend, which was higher than our KES 9-11.00 expectations, and 40.00% higher than the KE 9.00 in FY’21.

Customer deposits grew 19.53% y/y to KES 304.32Bn faster than the 16.36% y/y growth in the Loan book to KES 266.83Bn leading to a 239bps decline in the loan deposit ratio to 87.86%. We observed a notable jump in lending to sectors such as infrastructure (KES 15.00Bn vs KES 3.90Bn in FY’21), SME lending ( KES 33.00Bn vs 24.00Bn in FY’21) and Affordable housing (KES 267Mn). Digital lending platform (M-jeki) disbursed a monthly average KES 3.06Bn higher than the FY’21 average of KES 2.30Bn highlighting the growth potential in the digital lending business. Allocation to investment securities grew 40.34% y/y to 83.55Bn in FY’22 driven by hunt for higher yields. Fair Value changes through OCI recorded a 5.71x decline y/y to 58.20Mn.