Profit before Tax rises 17% to N3.5 Billion

Lagos, April 22, 2014 – Sterling Bank Plc (NSE: STERLNBANK / Reuters: STERLNB.LG /Bloomberg: STERLNBA:NL) – the ‘Bank’ – a full service national commercial bank releases its unaudited results for the quarter ended March 31, 2014.

In the Bank’s quarterly update to investors and analysts, 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 Management’s 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 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%.
Financial Highlights

Income Statement

• 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
Non-interest income also 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
Net operating income rose 29.7% to N15.2 billion (Q1 2013: N11.7 billion) on the back of growth in net interest income
Operating expenses 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
Profit before tax increased 17.3% to N3.5 billion, while profit after tax was N3.1 billion

Statement of Financial Position

Net loans & advances grew 4.8% to N337.2 billion (Dec. 2013: N321.7 billion) driven by growth in corporate lending
Customer deposits declined by 5.3% to N540.0 billion (Dec. 2013: N570.5 billion) reflecting Management’s focus on balance sheet efficiency
Shareholders’ funds increased4.7% to N66.4billion(Dec. 2013: N63.5 billion) due to profit accretion
Overall, total assets excluding contingent liabilities declined marginally by 0.8% to N701.9 billion (Dec. 2013: N707.8 billion)

Financial Ratios

IndicatorQ1 2014Q1 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 Share15k17k
Yield on Earning Assets13.2%11.1%
Cost of Funds5.6%5.9%
Net Interest Margin7.6%5.1%
Cost to Income71.7%72.1%
Mar 2014Dec 2013
NPL Ratio1.8%2.1%
Coverage Ratio78.0%80.3%
Capital Adequacy Ratio14.0%14.0%
Liquidity Ratio62.7%61.5%
Loan to Deposit Ratio62.4%56.4%

Investor Contacts

Abubakar Suleiman
M: +234 803 535 1172
E: 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: shina.atilola@sterling.ng

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