Stanbic IBTC Holdings Plc is reshaping its earnings model around trading activities and financial investments, as shrinking loan exposure and rising non-interest income signal a shift away from traditional banking as the primary driver of revenue.
The group’s audited results for the half-year ended June 2026 show non-interest earnings rising 126 per cent year-on-year to N278 billion, overtaking net interest income of N266 billion. The development came as the group expanded its balance sheet by N2.29 trillion to N10.91 trillion, with trading assets emerging as a major component of its asset allocation.
The change marks a significant departure from the previous year’s earnings profile, when interest income accounted for more than 74 per cent of gross earnings. By June 2026, its share had fallen to 55 per cent, as trading gains and other non-interest revenue streams compensated for weaker returns from lending and interest-bearing activities.
Trading revenue was central to the transition, rebounding from a loss of N856 million in the corresponding period of 2025 to more than N156 billion. It accounted for 45.4 per cent of non-interest earnings, underlining the growing contribution of market-related activities to the group’s financial performance.
Trading assets more than tripled to N2.89 trillion, largely driven by treasury bills and reverse repurchase agreements. Their share of total assets rose from 10 per cent at the end of 2025 to 26.5 per cent by June 2026, reflecting a substantial reallocation of resources towards financial-market instruments.
Financial investments also increased, rising from N1.48 trillion at the end of 2025 to N1.63 trillion at the half-year, while other assets more than doubled to N1.04 trillion. Together, these three asset categories now account for more than half of the group’s balance sheet, changing the composition of its assets and the sources of its earnings.
The shift has coincided with a continued contraction in lending exposure. Net loans and advances declined by N400 billion year-on-year to N3.44 trillion, while loans and advances as a proportion of total assets fell from 44.6 per cent at the end of 2025 to 31.5 per cent in June 2026.
Although customer lending increased to N2.58 trillion from N2.35 trillion at the end of 2024, the decline in the loan portfolio indicates that lending is playing a smaller role in the group’s asset allocation. The results do not, however, establish whether the change reflects a permanent strategic repositioning or a response to prevailing market conditions.
The earnings shift also comes against the backdrop of elevated credit losses in 2024, when the group reported more than N99 billion in losses. Tighter lending controls were followed by a reduction in loan losses to N14.2 billion in 2025 and N7.4 billion in the first half of 2026.
Lower credit losses have helped support profitability as the group’s income mix changes. Net profit margin rose to 36.9 per cent in June 2026, from 33.9 per cent a year earlier and 34.7 per cent at the end of 2025.
Gross earnings increased 27 per cent year-on-year to more than N650 billion, while profit after tax climbed 38 per cent to N239.7 billion. Earnings per share rose to N14.90 from N10.78 in the corresponding period last year.
The headline growth, however, masks contrasting trends across the group’s income streams. Interest income fell from nearly N380 billion in the first half of 2025 to N359 billion, while net interest income declined 14.3 per cent to just over N266 billion. Interest expenses rose 35 per cent to nearly N93 billion, adding pressure to the returns generated 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 results point to a growing reliance on trading and other non-interest activities to sustain earnings momentum.
That model offers the group an alternative to loan-led growth, particularly as management maintains tighter credit controls following the substantial losses recorded in 2024. But the scale of the trading-income rebound also makes the sustainability of market-related earnings an important consideration in assessing future performance.
Reflecting the half-year performance, the directors proposed an interim dividend of N4.50 per share. The qualification date is October 15, 2026, with payment scheduled for November 13, 2026.
