Sterling Bank’s profit rises by 14.3% to N10.3bn

Sterling Bank’s profit rises by 14.3% to N10.3bn

Sterling Bank has announced 14.3 percent rise in profit.

In spite of the regulatory headwinds and downturn in the Nigerian economy, the bank recorded growth in virtually all its performance indicators for the year ended December 31, 2015, pushing up profit before tax by 2.5 per cent to N11.0 billion. Similarly, profit after tax rose by some 14.3 per cent to N10.3 billion due to a higher retention of organic capital compared to the previous period.

Non-interest income grew by 13.7 per cent from N25.7 billion in 2014 to N29.3 billion largely due to a 57 per cent increase in trading income. Confirming the efficiency of the lender’s management, operating expenses decreased by 1.9 per cent from N50.6billion to N49.7 billion.

Net interest income however, declined by 8.1 per cent from N43.0 billion to N39.5 billion, driven by an 18.5 per cent increase in interest expense resulting in a 630 basis points reduction in net interest margin to 48.9 per cent.

Commenting on these financial results, Yemi Adeola, the Managing Director/ Chief Executive, stated: “I am pleased to report that we sustained our performance from the previous year driven by an improvement in operating efficiency. Cost-to-Income Ratio improved by 140 basis points to 72.2%, Capital Adequacy Ratio stood at a record high of 17.5%, while liquidity buffers remained strong as the Bank grew its After Tax Profit by 14.3%.

“Clearly, our 2015 performance offered a clear validation of the underlying resilience of our business model. The very challenging operating environment notwithstanding, we managed to and continue to maintain a delicate balance between delivering on near term goals and laying the foundation for the future that we see – one where our customers enjoy the experiences that we create together, which in turn becomes the basis for our long term profitability.

“Asset quality remained resilient with Non-Performing Loans (NPL) below the maximum regulatory threshold of 5% despite a significant reduction in the loan book, arising from the replacement of state government loans with federal government bonds. We also maintained a very liquid balance sheet position despite the implementation of the Treasury Single Account (TSA) by the FGN. This outcome reflects some initial progress with the retail funding strategy and further supports the material investments that we are making in this area.

Commenting on the outlook for the 2016, Yemi Adeola observed : “We are of the view that the current macro-economic challenges present their own opportunities for agile and dynamic operators. We recognize that re-structuring of the sort that the current Federal Administration is pursuing takes time but like many other Nigerian businesses, we view the pursuit of economic self-reliance as commendable.

“ Consequently, we remain optimistic for the future but are not under any illusion that the near term operating environment would be more favorable as we expect some policy volatility in the course of the year.

“There is clearly ‘a new normal’ and the future will belong to those who can develop new competences even while retaining the core strengths that have led them to success in the past. Our desire is to make Sterling Bank one of those”.

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