STANBIC’s gross earnings grew by a muted 0.27% YoY in 2020FY due primarily to weak interest earnings and an unfavourable electronic fee regime. Despite the bank’s considerable earning-assets growth, interest income (which typically accounts for 45% of gross earnings) declined by 12.15% to NGN105.78bn (vs. NGN120.41bn in 2019FY) on the back of depressed asset yields (9.70% vs. 11.60% in 2019FY). Fee-based income on the other hand, was dragged by a 19.36% decline in e-business income following regulatory reduction in electronic transaction fees. However, asset management fees supported fee-based income which ultimately grew by 0.16% YoY. Most helpful to topline performance were trading income and revaluation gains (+43.43% YoY). For 2021FY, our outlook for the group’s interest income is positive, backed by growth in interest-earning assets and an improved interest rate environment. Furthermore, growth in transaction volumes should support fee-based income, while revaluation and trading gains are not expected to be as significant.
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