Sterling Bank grosses N10.3bn profit

STERLING Bank Plc has posted a profit after tax of N10.3bn for the year ended December 31, 2015, which represents a rise of 14.3 per cent over last year’s figure. Its profit before tax rose by 2.5 per cent to N11bn, which the bank attributed to a higher retention of organic capital, compared to the previous period.

Non-interest income grew by 13.7 per cent from N25.7bn in 2014 to N29.3bn, and the bank said this was largely due to a 57 per cent increase in trading income. It also recorded a fall in operating expenses by 1.9 per cent from N50.6bn to N49.7bn.

Net interest income, however, declined by 8.1 per cent from N43bn to N39.5bn, 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, the lender explained.

Commenting on the financial results, the Managing Director/Chief Executive Officer of the bank, Yemi Adeola, said, “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 per cent, capital adequacy ratio stood at a record high of 17.5 per cent, while liquidity buffers remained strong as the bank grew its after tax profit by 14.3 per cent.

“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 below the maximum regulatory threshold of five per cent 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 by the Federal Government. This outcome reflects some initial progress with the retail funding strategy and further supports the material investments that we are making in this area.”

Adeola observed that the current macro-economic challenges presented their own opportunities for agile and dynamic operators, saying, “We recognise that restructuring 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.”

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