Stanbic Holdings PLC HY’23 earnings results were higher than our expectations. The lender posted a 47.01% y/y climb in PAT and a 47.07% growth in EPS to KES 7.05Bn and KES 17.84 per share respectively driven by a 44.44% y/y growth in net interest income and a 29.74% growth in non-interest income. NIMs remained adequate at 5.66% with trailing ROaE and ROaA declining y/y to 18.79% and3.17% respectively. The board of directors recommended a KES 1.15 interim dividend on the back of improved performance, contrary to expectations, pointing to a higher expected FY’23 total dividend.
Customer Deposits grew 10.51% y/y to KES 285.38Bn slower than the 15.30% y/y growth in the Loan Book to KES 281.39Bn leading to a 410bps increase in the loan to deposit ratio to 98.60%. Deposits decline was partly driven by cyclical customers and transitory franchise business which we suspect is related to trade finance and large corporate clients. We observed a notable jump in lending to SME’s (KES 22.00Bn vs KES15.00Bn in HY’22) and digital lending through Mjeki Platform (KES 23.00Bn vs KES 16.00Bn in HY’22) highlighting the growth potential in digital lending business. D.A.D.A lending similarly grew (KES 8.40Bn vs KES 6.90 Bn in HY’22) as well as Affordable Housing lending (KES 219.00Mn vs 156.00Mn in HY’22). Infrastructure lending came in at KES 1.20Bn a decline from KES 5.00Bn in HY’22. Allocation to investment securities grew 4.10% y/y to KES 54.73Bn in HY’23 driven by the hunt for higher yields.
