Stanbic IBTC Holdings Plc recorded a 40.1% increase in profit before tax to ₦341.6 billion in the first half of 2026, but the surge was largely driven by trading income as earnings from its core operations weakened.
The financial services group’s pre-tax profit increased from ₦243.7 billion in the first half of 2025. However, trading income swung from a loss of ₦856 million to a gain of ₦126.4 billion, providing a major boost to its overall performance.
Excluding trading income from both periods, profit before tax would have fallen to approximately ₦215.2 billion from ₦244.6 billion a year earlier, representing a decline of about 12%.
The figures suggest that the headline profit growth may not fully reflect the strength of the group’s underlying operations, raising questions about the sustainability of its earnings in the second half of the year.
Declining Interest Income Pressures Earnings
Stanbic IBTC’s net interest income fell by 14.3% to ₦266.3 billion from ₦310.8 billion in the corresponding period of 2025.
The decline occurred despite growth in its balance sheet and an increase in customer deposits. Interest expenses also rose, adding pressure to the income generated from lending and other interest-bearing activities.
Net fee and commission income provided some support, rising by 27.1% as the group recorded growth in fee-generating businesses.
However, operating expenses increased by 9.1% to ₦195.4 billion, up from ₦179.1 billion in the previous year. The higher costs further limited earnings growth from the group’s underlying operations.
Lower impairment charges offered some relief. Credit impairment losses declined by 33.8% to ₦7.4 billion, supporting profitability during the period.
Trading Income Improves Reported Efficiency
The trading gain also contributed to an improvement in Stanbic IBTC’s reported cost-to-income ratio, which fell to 35.9% from 41.3% in the first half of 2025.
However, excluding trading income, the ratio would have risen to approximately 46.7% from 41.2%, indicating that operating costs grew faster than the group’s underlying income.
Operating income excluding trading revenue declined by 3.9% to ₦417.9 billion, while expenses continued to increase.
The difference matters because trading income can fluctuate with financial market conditions, whereas expenses such as staff costs, technology investments and infrastructure are recurring commitments.
Sustaining improved efficiency will therefore require stronger recurring revenue or slower expense growth, rather than continued reliance on unusually large trading gains.
Deposits Grow Faster Than Lending
The group’s balance sheet expanded during the six-month period, with customer deposits increasing to ₦4.63 trillion and net customer loans rising to ₦2.59 trillion.
However, lending growth lagged behind deposit growth. The loan-to-deposit ratio declined to 55.8% from 67.9% a year earlier, extending a downward trend in the proportion of deposits converted into customer loans.
Deposits from other banks also increased sharply to ₦1.10 trillion from ₦269 billion, contributing significantly to the growth in funding.
Meanwhile, interest expenses rose by about 35% to ₦92.8 billion. The available financial statements do not separately disclose the cost of interbank funding, making it difficult to assess how much this source contributed to the increase.
The bank’s ability to deploy its expanding deposit base into profitable lending and other activities will be important to its future earnings performance.
Asset Quality Shows Improvement
Stanbic IBTC reported improvements in its loan quality indicators during the period. Stage 3 loans declined to ₦73 billion, while the non-performing loan ratio fell to 2.73% from 4.70% in the first half of 2025.
Credit impairment charges also decreased, supporting the group’s profitability.
However, the allowance held against Stage 3 loans fell to ₦56.5 billion, a reduction of ₦43.4 billion. Further clarification would help establish how much of the improvement in reported bad loans came from repayments, recoveries, restructuring or write-offs.
The level of provisions maintained against remaining problem loans will also matter if economic conditions weaken and borrowers face renewed repayment pressure.
Higher Dividend Raises Earnings Questions
Despite the mixed performance beneath its headline profit growth, Stanbic IBTC’s board recommended an interim dividend of ₦4.50 per share, an 80% increase from ₦2.50 in the corresponding period of 2025.
The proposed payout amounts to approximately ₦71.6 billion, equivalent to about 30% of profit attributable to shareholders.
Return on equity remained broadly stable, while equity attributable to owners increased following the group’s previous capital raising.
The higher dividend signals confidence in the group’s financial position. However, the sustainability of future payouts will depend on whether the company can maintain strong earnings without relying heavily on volatile trading income.
Stanbic IBTC’s first-half results highlight the difference between headline profitability and the performance of its core businesses. Although the group recorded significant profit growth, weaker net interest income and rising costs suggest that sustaining this momentum may require stronger recurring revenue in the months ahead.
