Provisioning effort, cost control, proactive management STB is preparing IFRS
In a context strongly affected by the economic recession at national and international level, the fallout from the Covid-19 health crisis and the recent international geopolitical conflicts, STB Bank was able to close the first half of 2022 with results in line with the ambitious forecasts it has set itself.
STB Bank, which acts as a key player in the financing of the Tunisian economy, has further extended its assistance to the various economic sectors, supporting both professional and private clients to overcome their difficulties, while actively participating in the financing of the public debt.
In fact, gross contributions to the economy grew at a rate well above the expected targets for the first half, going from 13,510 million dinars at the end of December 2021 to 14,292 million at the end of June 2022, thus a growth rate of 12% of annual basis.
This development marked customer receivables with a growth rate that peaked at 13.4% year-on-year, far higher than at the sector level, testifying to the significant efforts STB has made as a citizen bank serving special companies weakened by liquidity problems.
In addition to the assistance to public companies, the bank has stepped up its interventions in the financing of the public debt, through participation in the various tranches of the government loan, in auctions of government bonds as well as in the syndicated loan in foreign currency.
On another level, the bank has worked to mobilize the necessary resources, especially those that provide the best support for jobs in terms of cost and maturity. In that sense, the bank continued its momentum in collecting stable deposits from customers to maintain their share of total deposits with the aim of keeping resource costs at a low level.
In this regard, it should be noted that the efforts to mobilize deposits have made it possible to secure the bank’s rank on the podium with an outstanding amount of 9,257 million dinars and to widen the gap with its peers in terms of savings. deposit.
At the same time, STB Bank was able to increase the amount of loan resources by 84 million dinars (+17%) thanks to the closing of a bond loan of 100 million dinars and the signing of certain external lines for a volume of 14 million dinars.
Through this development, through proactive management of these aggregates, the bank has been able to demonstrate liquidity (LCR) and transformation (LTD) ratios at levels consistent with prudential standards.
The momentum instilled since the beginning of the year at the level of the various aggregates of activity and as described above, was de facto transposed to net banking income, whose growth rate accelerated further and reached a volume of 326 million dinars, regardless of the devastating effect of the deterioration of the quality of receivables in certain relationships working in weakened sectors such as tourism and construction.
This latest development has given the bank the 3th ranking in terms of generating added value, made it possible to achieve a gross operating profit of 170 million dinars, which increased by 11.4 million (+7%) compared to the level at the end of June 2021.
In this context, it is important to emphasize the bank’s efforts to control operating costs, which have developed despite an inflationary context within the limit of 7% to a total of 160 million dinars, the majority of which relates to personnel costs. .
As a result, the operating ratio improved by 0.2 percentage points and returned from 49.2% to 49% following the development of net banking income (23.3 million dinars or 7.7%) at a faster pace than operating expenses (10.8 million dinars or 7.3%). ).
In addition to these performances and in application of the legal provisions on provisions, the bank allocated a large envelope of provisions to cover credit risks at the end of June 2022, which had a negative impact on the net result, which logically decreased to 40 million dinars. , a decrease of 32% compared to the level at the end of June 2021.
In fact, and in continuation of its strict provisioning policy, the bank withdrew from its profits an amount of 116 million dinars at the end of the first half of 2022, which represented the net risk that it allocated to cover the write-off of its credit. portfolio, especially those related to the tourism and construction sectors, against a much lower volume recorded a year earlier (i.e. 48 million dinars).
This effort reflects the bank’s desire to maintain its prudent policy with regard to risk management and coverage of receivables with a high probability of deterioration in their quality in order to anticipate the requirements for the imminent adoption of the IFRS reference.
In terms of solvency ratios, these have certainly developed moderately and remain at levels well above the regulatory thresholds with comfortable excess capital, giving the bank additional development capacity and better resilience.