Stanbic IBTC Holdings Plc is pivoting its revenue strategy toward trading and financial investments, as non-interest income rises while lending yields weaken. The audited results for the half-year ended June 2026 indicate non-interest earnings climbed 126% year-on-year to N278 billion, exceeding net interest income of N266 billion.
This shift represents a marked break from the prior year, during which interest earnings made up more than 74% of total revenue. By the end of June 2026, that proportion had dropped to 55%, with profits from trading and other non-interest sources offsetting softer loan performance. Crucially, trading income drove the change, swinging from an N856 million loss in the comparable 2025 period to upwards of N156 billion.
Trading Revenue Drives Earnings Shift
The portion of non-interest income derived from trading rose to 45.4%, showing an expanding contribution to the company’s results. The value of trading assets surged past threefold, reaching N2.89 trillion, mainly because of holdings in treasury bills and reverse repos. Consequently, these assets grew from representing 10% of total holdings at 2025-year-end to 26.5% by June 2026, indicating a major shift toward market-based instruments.
Financial investments increased from N1.48 trillion at the end of 2025 to N1.63 trillion in the half-year, while other assets more than doubled to N1.04 trillion. Together, these three asset categories now represent over half of the group’s balance sheet, altering both asset composition and earnings sources.
Contraction in Lending Exposure
This movement aligns with a reduction in credit exposure. Net loans and advances dropped by N400 billion compared with the previous year, settling at N3.44 trillion, and their share of total assets fell from 44.6% to 31.5% over the same interval. Even though lending to customers rose to N2.58 trillion from N2.35 trillion at the close of 2024, the overall shrinkage of the loan book signals a diminished importance of credit in the asset mix.
The results do not clarify whether this reflects a permanent strategic repositioning or a response to market conditions. However, lower credit losses have supported profitability amid the earnings mix change. Loan losses dropped to N14.2 billion in 2025 and N7.4 billion in the first half of 2026, down from over N99 billion in 2024.
Profitability and Dividend Outlook
The net profit margin climbed to 36.9% in June 2026, compared with 33.9% a year before and 34.7% at the close of 2025. Total earnings grew 27% to exceed N650 billion, and profit after tax rose 38% to N239.7 billion. Earnings per share advanced to N14.90 from N10.78 in the same period a year earlier.
Despite these gains, interest income fell from nearly N380 billion in the first half of 2025 to N359 billion, while net interest income declined 14.3% to just over N266 billion. Interest expenses rose 35% to nearly N93 billion, adding pressure to returns from interest-bearing assets. Non-interest earnings therefore accounted for the entire increase in gross revenue, more than offsetting the decline in net interest income.
The model offers an alternative to loan-led growth, particularly as management maintains tighter credit controls following 2024’s substantial losses. Yet the scale of the trading-income rebound raises questions about the sustainability of market-related earnings. Reflecting the half-year performance, directors proposed an interim dividend of N4.50 per share, with payment scheduled for November 13, 2026.
