Reports Earnings of N34.3 Billion, Declares Profit after Tax of N5 Billion

Lagos, April 11, 2011 – Sterling Bank Plc (NSE: STERLNBANK/ Reuters: STBP.LG) – the ‘Bank’ – today released its full year audited results for the 12-month period ended December 31, 2010.

The Bank sustained its profitability achieved in the third quarter driven by improved margins and control in operating costs. At 21%, the Bank’s Return on Average Equity is in the first rank percentile among all banks.

Speaking on the Bank’s results, Yemi Adeola, Group Managing Director said:
I am glad to report our full year performance, which was in line with our expectations and consistent with broad sector performance and wider economic trends. A stronger balance sheet position arising from the clean up in 2009, reduced funding costs, and supportive government policies, in particular, the takeoff of the Asset Management Company of Nigeria (AMCON) served to re-ignite confidence in the banking sector. We were able to grow our loans by 25% and reduce non-performing loans by 44% through a combination of loan recovery and sale of impaired assets to AMCON.
Sterling Bank’s business fundamentals provide reassurance on the validity of our business model and execution capabilities on the strategy, albeit tempered by exogenous factors including low interest rates and lower asset yields. Refining our strategy and strengthening our capital position through the infusion of long-term debt were also major items on our management agenda in 2010. Leveraging that improved capital position as a basis for supporting institutional profitability is a key priority for our management team in the coming months and we expect to see the payoff in 2011.    
Financial Highlights for 12-Month Period ended December 31, 2010
Income Statement
  • Gross earnings declined 8% to N34.3 billion from N37.4 billion in 2009 (annualized) as a result of the low interest rate regime that obtained for the greater part of  the year
  • Funding costs declined 33% to N11.1 billion from N16.5 billion in 2009 (annualized) feeding through a 32% improvement in Net Interest Margins
  • Operating expenses reduced by 11% to N15.8 billion from N17.7 billion in 2009 (annualized) reflecting progress in the Bank’s cost discipline and efficiency programs introduced in 2009
  • Profit after Tax rose to N5.0 billion from the previous year net loss of N(7.2) billion (annualized)
Balance Sheet
  • Total Assets grew 25% to N277.1 billion from N221.3 billion, spurred by slightly improved economic conditions
  • Deposits grew 26% to N203.1 billion from N161.3 billion in 2009 reflecting slight market share gains
  • Net Loans & Advances (including Advances under Finance Lease) grew 25% to N103.8 billion from N82.9 billion in 2009
  • Non-performing loans reduced by 44% from N22.8 billion in 2009 to N12.9 billion resulting from progress in loan recovery and the transfer of delinquent assets to AMCON
Financial Ratios
  • Cost-to-Income ratio (including allowances for risk assets) of 76% (211% in 2009)
  • Earnings per share rose to 40k from a loss per share of 72k in 2009
  • Net interest margin rose to 56% (39% in 2009)
  • Return on Average Equity of 21%, (-ve 27% in 2009)
  • Liquidity Ratio stood at 47% (50% in 2009)
  • Capital Adequacy Ratio stood at 13% (12% in 2009)
Download: A PDF of this earnings release may be downloaded here and a plain text version here.
Corporate Contacts
Investors
Yemi Odubiyi
M: +234 803 535 0991
E: yemi.odubiyi@sterlingbankng.com
Abubakar Suleiman 
M: +234 803 535 1172
E: abubakar.suleiman@sterlingbankng.com
Media
Abimbola Sowemimo
Head, Brand Management & Communications
M: +234 803 306 9033
E: abimbola.sowemimo@sterlingbankng.com
About Sterling Bank 
Sterling Bank PLC is the preeminent investment banking establishment in Nigeria. It commenced operations as NAL Bank in 1960. Today, with over N277 billion in assets and 95  branches nationwide, Sterling Bank has grown into a major financial supermarket offering investment banking, commercial banking, asset management, stock broking,
insurance, and registrar services. The Bank prides itself as the “One Customer Bank”  that celebrates each customer a unique individual. For further information, please visit http://www.sterling.ng .
Forward-Looking Statements 
This release may contain forward-looking statements which reflect Sterling Bank’s current views with respect to, among other things, the Bank’s operations and financial performance. These forward-looking statements may be identified by the use of words such as “outlook,”  “believes,”  “expects,” “potential,”  “continues,”  “may,”  “will,” “should,”  “seeks,”  “approximately,”  “predicts,”  “intends,”  “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. Sterling Bank believes these factors include but are not limited to those described in its Annual Report for the financial year ended December 31, 2009. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this release. Sterling Bank undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.
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