Stanbic bank profits spike, share price unchanged

By Samuel Sanya

STANBIC Bank (SBU) recorded a strong 10.3% rise in its unaudited half-year profits to sh58.3b at the end of June, though analysts predict that the positive results may do little to spur its share price in the immediate future.

Suraj Srivastava, a senior manager at Baroda Capital Market, says the large number of outstanding offers on the SBU counter is likely to peg the bank’s share price at sh25, as investors look to sell.

“The bank has recorded positive results, but the market fundamentals may not support a rise in its share price. There were 11 million shares on offer against two million outstanding bids on Tuesday. The buyers are offering sh20 per share,” he explained.

“Supply is high in the markets but buying is scarce. This may lead to its share price remaining at the current levels in the time being,” Srivastava added.

The bank’s earning per share took a dip to sh5.69, from sh10.32 in June 2011, as interest and similar incomes grew to sh190b, from sh124b in the same period.

Phillip Odera, the Stanbic Bank boss, revealed that the bank is set to upgrade its banking software, adding that this may increase the bank’s cost to income ratio in coming months.

“Previously, Stanbic Bank’s operating platform had a maximum number of accounts that it could handle. The upgrade will enable it hold an unlimited number of accounts,” he said.

Arthur Oginga, the Stanbic Bank finance director, pointed out that lending is likely to pick up as the Central Bank looks to spur economic growth, especially through spending on infrastructure projects.

“The Central Bank’s preoccupation will be attaining higher economic growth as there is a lot of focus on infrastructure spending. The economy is expected to turn around quickly, with the value of collateral going up. The outlook is largely positive,” he said.

Volumes traded on the bourse took a dip, with shares worth sh25m by the close of business on Tuesday, from sh70m a week ago.

The dfcu Bank counter was inactive on Tuesday, with outstanding offers of 12,500, up from nil last week. The strong half-year results that showed an increase in profits by more than 5% has pushed its share price to sh1,028, from sh1,000.

On the contrary, East African Breweries (EABL) share price dipped to sh6,639, from sh6,893 for the cross listed company, despite impressive results indicating a 29% rise in profits to sh335.4b.

Stanbic Bank traded 106,958 shares, raking in sh2.7m, while Baroda sold 90,356 shares, making sh22.5m to close trading for the day.