Lagos, July 25, 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 June 30, 2014.

In the Bank’s quarterly update to investors and analysts, Yemi Adeola, the Managing Director/ Chief Executive, stated:

‘Our performance in the first half of the year further demonstrates the underlying strength of our core business. In spite of the challenging operating environment, we achieved a 130 basis point improvement in margins to 7.7% resulting from a 60 basis point reduction in the cost of funds and a 70 basis point increase in asset yield. Top-line earnings remained strong with a 16% growth to N48.7 billion from  N41.9 billion in the comparable period in 2013. However, the cost-to-income ratio increased by 180 basis points to 73% reflecting ongoing investments in the upgrade of our physical infrastructure and the rollout of alternative channels. Consequently, profit before tax was relatively stable at N6.3 billion.

During the period, we completed eight new branches while thirteen others are at various stages of completion. We also remodeled several of our existing branches, deployed 168 additional Automated Teller Machines (ATMs) and signed-on over 200 merchants to drive our Agent Banking model for financial inclusion.

We are confident that the second half of the year will reinforce the trend we have seen in the last six months. We remain focused on efficiency – keeping the cost-to-income ratio within an acceptable range. By and large, we are optimistic that Sterling Bank’s full-year returns will be in line with our forecasts and expectations.’ 

Financial Highlights

Income Statement

·         Net interest income rose 40.2% to N21.3 billion (1H 2013: N15.2 billion) feeding from a 20.4%             growth in interest income to N37.4 billion

SPONSORED

·         Non-interest income also grew by 4.5% to N11.3 billion (1H 2013: N10.8 billion) driven by a 48%           growth in trading income to N3.5 billion

·         Net operating income rose 21.6% to N30.1 billion (1H 2013: N24.8 billion) on the back of growth           in net interest income

·         Operating expenses increased 28.5% to N23.8 billion (1H 2013: N18.5 billion) driven by ongoing investments in branch refits and expansion,and rollout of alternative channels

·         Profit before tax increased marginally by 1.0% to N6.3 billion, while profit after tax reduced by               6.7% to N5.5 billion due to a 131.3% increase in income tax

Statement of Financial Position

• Net loans & advances remained relatively stable at N321.8 billion (Dec. 2013: N321.7 billion) due to our selective approach to asset creation
•  Customer deposits declined by 2.5% to N556.3 billion (Dec. 2013: N570.5 billion) reflecting Management’s focus on balance sheet efficiency
•  Shareholders’ funds remained relatively stable at N63.8billion(Dec. 2013:                         N63.5 billion) as a result of dividend payout in Q2 2014
•  Overall, total assets excluding contingent liabilities increased by 3.3% to                         N731.1 billion (Dec. 2013: N707.8 billion)

Financial Ratios