Stanbic IBTC Holdings Plc ("STANBIC") is likely to sustain the earnings run rate observed in 9M'24, with EPS projected to hit N18.36 in FY'24 (vs N14.11 in 9M'24 and N10.85 in FY'23) and progress to N22.67 in FY'25. The earnings projection for FY'24 is premised on forecasted 116.3%, 43.5%, and 77.9% YoY increases in interest income, net fee & commission income, and trading revenue that we also expect to benefit from the low base of Q4'23.
In our view, STANBIC's robust earnings outlook is supported by our expectation of higher asset yields in the near term, with the knock-on effect likely to result in a net interest income (NII) contribution to operating income of 54.8% in FY'24 before slightly tapering to 54.1% in FY'25. These projected contributions are clearly higher than the 5-year average of 43.9% and underscore the gravitation to high interest rate yielding assets consistent with the recent macroeconomic/business environment. We link the moderation in NII contribution in FY'25 to expected cuts in interest rates in the second half of 2025 and possible temperance in loan growth, given the 70bps YoY increase in non performing loans (NPL) to 3.2% in 9M'24.
