Sterling Bank Records N3.5n Profit in First Quarter

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By Segun Oniyide

Sterling BankAfter recording an impressive performance for 2013, Sterling Bank Plc has consolidated on the performance with improved results for the first quarter (Q1)ended March 31, 2014.

Despite the industry headwinds, Sterling Bank    Tuesrday reported gross earnings of  N24.6 billion, up from  N19.84 billion recorded in the corresponding period of 2013. Profit before tax rose from N3.02 billion to N3.54 billion, while profit after tax increased from N2.72 billion to N3.14 billion.

Net interest income rose by 58 per cent due to 31 per cent growth in interest income relative to a modest increase of eight per cent in interest expense. This resulted in a 35 per cent growth in operating income to N16.2 billion.

The annualized return on average equity was 20 per cent in line with the bank’s medium term strategic objectives.

Commenting on the results, Managing Director, Sterling Bank Plc, Mr. Yemi Adeola, said the Q1 was a positive start for the bank and a reflection of  its improving efficiency and robust credit risk management.

According to him, in spite of a marginal decline in deposit to N540 billion, the bank recorded a 30 basis points reduction in cost of funds to 5.6 per cent; reflecting management’s focus on balance sheet efficiency.

He noted that loans and advances grew to N337 billion, while asset quality remained strong with a non-performing loan ratio of 1.8 per cent.

Over the next few quarters, we will continue the upgrade of our physical infrastructure and rollout of conventional and alternative channels in order to deepen market penetration of our products and grow retail deposit market share. Loan growth will remain steady and disciplined with the overall target for the year set at 25 per cent,” Adeola said.

The bank had grown its profit in 2013 by 24 per cent to N9.3 billion. Sterling Bank’s total assets including contingent liabilities increased by 28 per cent to N909.4 billion while shareholders’ funds grew by 36.1 per cent to N63.5 billion from  N46.6billion due to profit accretion and net proceeds of N12.1 billion from the rights issue.

Asset quality improved significantly with non-performing loan ratio down to 2.1 per cent from 3.8 per cent in 2012 notwithstanding a 40 per cent growth in loans and advances. We also gained traction in our retail drive with an active customer base exceeding one million resulting in 23 per cent growth in deposits,” he said.

 

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