Lagos, April 22, 2014 โ Sterling Bank Plc (NSE: STERLNBANK / Reuters: STERLNB.LG /Bloomberg: STERLNBA:NL) โ the โBankโ โ a full service national commercial bank releases its unaudited results for the quarter ended March 31, 2014.
In the Bankโs quarterly update to investors and analysts,ย Yemi Adeola, the Managing Director/ Chief Executive, stated:
We started the year on a positive note, achieving double-digit growth on key revenue lines. Net interest income rose by 58% owing to a 31% growth in interest income relative to a modest increase of 8% in interest expense. This resulted in a 35% growth in operating income to N16.2billion. Our profit before tax rose to N3.5 billion, an increase of 17%; while the annualized return on average equity was 20% in line with our medium-term strategic objectives. Despite a 5% decline in a deposit to N540 billion, we recorded a 30 basis points reduction in the cost of funds to 5.6%; reflecting Managementโs focus on balance sheet efficiency. Loans and advances grew by 5% to N337 billion, while asset quality remained strong with a non-performing loan ratio of 1.8%.
Over the next few quarters, we will continueย the upgrade of our physical infrastructure andย 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%.
Financial Highlights
Income Statement
โข Net interest income rose 58.1% to N10.3 billion (Q1 2013: N6.5 billion) feeding from a 30.6% growth in interest income to N18.7 billion
โข Non-interest income alsoย grew by 7.4% to N6.0 billion (Q1 2013: N5.6 billion) driven by a 29.9% growth in trading income to N2.3 billion
โข Net operating incomeย rose 29.7% to N15.2 billion (Q1 2013: N11.7 billion) on the back of growth in net interest income
โข Operating expensesย increased 34.0% to N11.6 billion (Q1 2013: N8.7 billion) driven by on-going investments in branch refits and expansion in addition to an increase in AMCON surcharge
โข Profit before tax increasedย 17.3% to N3.5 billion, whileย profit after taxย was N3.1 billion
Statement of Financial Position
โข Net loans & advances grewย 4.8% to N337.2 billion (Dec. 2013: N321.7 billion) driven by growth in corporate lending
โข Customer depositsย declined by 5.3% to N540.0 billion (Dec. 2013: N570.5 billion) reflecting Managementโs focus on balance sheet efficiency
โข Shareholdersโ fundsย increased4.7% to N66.4billion(Dec. 2013: N63.5 billion) due to profit accretion
โข Overall, total assetsย excluding contingent liabilities declined marginally by 0.8% to N701.9 billion (Dec. 2013: N707.8 billion)
Financial Ratios
| Indicator | Q1 2014 | Q1 2013 |
| Pre Tax Return on Average Equity (annualized) | 22.6% | 25.2% |
| Post Tax Return on Average Equity (annualized) | 20.0% | 22.7% |
| Return on Average Assets (annualized) | 2.0% | 2.0% |
| Earnings per Share | 15k | 17k |
| Yield on Earning Assets | 13.2% | 11.1% |
| Cost of Funds | 5.6% | 5.9% |
| Net Interest Margin | 7.6% | 5.1% |
| Cost to Income | 71.7% | 72.1% |
| Mar 2014 | Dec 2013 | |
| NPL Ratio | 1.8% | 2.1% |
| Coverage Ratio | 78.0% | 80.3% |
| Capital Adequacy Ratio | 14.0% | 14.0% |
| Liquidity Ratio | 62.7% | 61.5% |
| Loan to Deposit Ratio | 62.4% | 56.4% |
Investor Contacts
Abubakar Suleiman
M: +234 803 535 1172
E:ย abubakar.suleiman@sterling.ng
Yemi Odubiyi
M: +234 803 535 0991
E: yemi.odubiyi@sterling.ng
Chimaobi Nwaokoma
M: +234 803 406 6104
E:chimaobi.nwaokoma@sterling.ng
Media Contact
Shina Atilola
M: +234 802 342 3011
E:ย shina.atilola@sterling.ng
