Stanbic IBTC Holdings Plc exposure to the oil and gas sector is raising concerns as loan losses surge.
Stanbic recorded a net impairment loss of N10.29 billion in Full year 2022, compared to a write back of N1.51 billion in Full year 2021, because of higher expected credit losses on its oil and gas portfolio.
The oil and gas sector was responsible for 24.60% of Stanbic’s total Non-Performing Loan (NPLs), last year, compared to 5.1% in 2021.
In 2022, the Stanbic group’s gross loans crossed the one-trillion Naira mark, rising by 30.85% N1.21 trillion.
This, however, came with higher risk as the NPL ratio edged up to 2.40% compared to 2.15% in 2021, and the NPL coverage ratio declined to 70.04% from 124.01% in 2021.
Nonetheless, the NPL ratio remains reasonably below the regulatory threshold of 5.00%.
Furthermore, the group’s Capital Adequacy Ratio (CAR) and Liquidity Ratio came in above prudential levels at 20.80% and 85.04%.