Coronation rates Stanbic high after growing six months profit

Coronation Research rated IBTC Bank a ‘Buy’ on Wednesday after the lender reported pre-tax profit growth of 61.8 per cent year-on-year for the six months ended on June 30 and a profit after tax growth of 37.8% over the same period. IBTC released its results late on Tuesday after the market had closed. The result […]

Coronation Research rated IBTC Bank a ‘Buy’ on Wednesday after the lender reported pre-tax profit growth of 61.8 per cent year-on-year for the six months ended on June 30 and a profit after tax growth of 37.8% over the same period.

IBTC released its results late on Tuesday after the market had closed. The result showed that the stand-alone Q2 pre-tax profits increased by 60% over the same period last year, while net profits increased by 37.8% year on year.

Coronation raised its target price for IBTC at N45.00, up from the stock’s closing price of N30.50 at the close of trading on the Nigeria Exchange yesterday, representing an upside of 47.5%.

The bank’s interest income rose by 54.3% to N68.25 billion from N44.23bn a year ago, while interest expense increased by 57.7% to N17.89bn, from N11.35bn. This was driven by a 193.3% year-on-year increase in interest paid on customer deposits. 

Over the first half, the bank’s trading revenue almost tripled its value in the same period in 2021, rising by 198.2% to N16.32bn from N5.47bn.

The market reacted positively to the results, as the stock rose by 8.9 percent or N2.50 on Wednesday to close at N30.50.  It was the second-highest gainer for the day on the NGX.

Coronation attributed this to the higher dividend announcement of N1.50 per share, representing a 50 percent increase of the N1 per share paid in H1:21, and the double-digit earnings growth. The stock has declined 15.3 percent year-to-date.

“We hope the group can sustain the recovery in trading revenues which have historically been a solid contributor to Net revenue,” an analyst at Coronation Research wrote in a note to clients.