Stanbic IBTC result fails to sway investors, U.K owner moves to boost confidence

U.K investor, Stanbic Africa Holding Limited, has moved to tighten its control in Stanbic IBTC, following the share acquisition by investment banker, Atedo Peterside – as they join forces to succeed where the management failed.

SAHL, which is a subsidiary of Standard Bank, parted with N6.99 million to purchase 179,392 units of Stanbic IBTC Shares at an average price of N39.00.

It had previously acquired two million shares on November 2 at N78 million, more than a month after it purchased 1,362,606 shares for N53.14 million.

As of 2007 when Peterside’s IBTC Chartered and Stanbic Bank Nigeria Limited, wholly owned by SAHL, merged, the U.K investor held 50.1 percent, taking control of ownership as substantial shareholder.

Over the years, it has increased its controlling stake in Stanbic IBTC to over 67.02 percent, accounting for 7,443,450,299 shares, but its recent acquisitions has taken the total share to 7,446,992,297, which is worth N290.43 billion when pegged to its current stock market price of N39.

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The investor’s recent insider dealing followed Peterside’s decision to beef up his stake in Stanbic IBTC, by purchasing 4.16 million shares through his firm, SITL The First ANAP Domestic Trust.

ANAP Trust paid N162.50 million to make the stock purchase at a cost of N39 per share. This increased Peterside’s total holding to 131,166,667, worth N5.11 billion.

Can Peterside, SAHL succeed where its poor earnings failed?

SAHL and ANAP Trust are the two major shareholders at Stanbic IBTC, and their share acquisition comes at a period the capital market’s confidence towards the firm is low, causing its stock value to remain flat at N39 in the last four months.

Due to the negative outlook around Stanbic IBTC, sell off among shareholders and low investor confidence have dragged down the lender’s stock value by 8.62 percent in H1, and 3.10 percent in H2-to-date, according to Ripples Nigeria analysis.

Year-to-date, Stanbic IBTC’s share has crashed from N44.05 per share to N39. With the tumbling stock value, the two major shareholders are taking steps to reassure the capital market, and douse the negative sentiment hovering on the firm.

This negative outlook has been further compounded by poor earnings of Stanbic IBTC, as gross earnings declined by 20 percent in Q3 2021 to N146.6 billion, down from N183.3 billion in Q3 2020.

Profit before tax was down to N39.9 billion, a significant difference of 40 percent when compared to the N66.1 billion generated during the corresponding period.

The insider dealing by Peterside and the U.K investor seem to be the last card pulled to save Stanbic IBTC share from further crash having suffered 11.46 percent decline year-to-date.

Insider trading is often seen as a roadmap for minority shareholders and prospective investors to buy or sell. With ANAP and SAHL joining forces to buy the dip, they sending a positive growth signal to the capital market, but if the substantial shareholders were selling off, its a pointer of an impending negative period.

But with the poor financial results in Q3 dampening the mood around Stanbic IBTC’s stock in the Nigerian bourse, it’s left to be seen how the capital market will react to Peterside and SAHL’s presence in the stock market.

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