Records 11% Growth in Gross Earnings to N18.2 Billion

Lagos, July 25, 2011 – Sterling Bank Plc (NSE: STERLNBANK/ Reuters: STBP.LG) – the ‘Bank’ – today released its unaudited results for the first six months ended 30 June 2011.

Speaking on the results, Yemi Adeola, Group Managing Director/CEO said:

We are pleased to announce that Sterling Bank achieved 11% growth in gross earnings and recorded 20% growth in loans & advances (including advances under a finance lease). Profit before tax and allowances for risk assets grew by 24% demonstrating the underlying strength of our core business. In line with our medium-term goals, we reduced non-performing loans (NPL) to less than 5% of total loans, an improvement from the 11.5% level reported in December 2010.

Over the next six months, our priority is to accelerate the creation of risk assets, pursue deeper market penetration of our products to gain a larger share of customer wallet and sustain the growth of the retail share of our deposit mix for enhanced margins.

The Board and Management have adopted a long term view of Sterling Bank’s appropriate strategic objectives and are aligning operations and investments to accomplish these in a manner that delivers shareholder value. To ensure adequate resources are available to pursue the objectives in the short-term, we successfully raised N7.5 billion (~US$50m) non-convertible debenture stock from a local investor group signifying confidence in our growth agenda.

Financial Highlights for the Second Quarter ended 30 June 2011

Income Statement

• Gross earnings rose 11% to N18.2 billion from N16.3 billion in the comparable period of 2010

• Funding costs increased 10% to N6.5 billion from N5.9 billion in the comparable period of 2010 due to a high-interest rate regime following the upward review of the monetary policy rate

• Operating income rose 12% to N11.6 billion from N10.3 billion in the comparable period of 2010 reflecting improvement in non-interest Income

• Operating expenses increased 8% to N8.4 billion from N7.7 billion resulting from inflationary pressures during the period

• Profit before Tax and Allowances for Risk Assets grew 24% to N3.2billion, while Profit after Tax stood at N2.6 billion.

Balance Sheet

• Total Assets grew by 7% to N296.0 billion from N277.1 billion in December 2010

• Deposits rose slightly by 3% to N209.1 billion from N203.1 billion in December 2010

• Net Loans & Advances (including Advances under Finance Lease) grew 20% to N124.3 billion from N103.8 billion in December 2010.

Financial Ratios

• Net Loan-to-deposit of 69% (63% in December 2010)

• Single-digit Non-performing Loans Ratio of 4.9% (11.5% in December 2010)

• Liquidity Ratio of 43%, while Capital Adequacy Ratio stood at 14%

• Annualized Return on Average Equity of 19% (34% in H1 2010)

• Net Interest Margin remained relatively stable at 48%.

 

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 as 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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