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Sterling Bank PLC Reports IFRS Audited Results for the Year Ended December 31, 2012

Sterling Bank
Published: November 30, 2012

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Profit Before Tax rises33% to N7.5 billion

Lagos, April 03, 2013– Sterling Bank Plc (NSE: STERLNBANK/ Reuters: STBP.LG) – the ‘Bank’ – today reported its audited results for the year ended December 31, 2012.

Speaking on the results, Yemi Adeola, Managing Director / CEO said: 
I am delighted with the Bank’s 2012 performance, given the marked improvement in profit from core operations which rose by 108% to N7.5billion from N3.6billion in 2011. This reflects the enhanced capacity of the Bank following the business combination with ETB. This performance was driven by a 66% growth in interest income. Significantly, we also recorded a 100 basis point improvement in our asset quality with the non-performing loan ratio down to 3.8% in 2012 despite a 42% growth in loans to N229.4 billion.
Going into 2013, our goal is to reduce our cost of funds, enhance our brand presence in our target markets and improve operating efficiency. To this end, we plan to raise an additional US$200 million through the issuance of equity instruments. We have also revamped our retail strategy through a number of initiatives for low-end customers. Our physical infrastructure is being upgraded to capture a high-street retail look and feel, and restructured along the lines of hub (generic) and spoke (targeted) delivery platforms. Management is optimistic that these initiatives will make the Bank more efficient and profitable.
Finally, the Board of Directors has proposed a dividend of 20 kobo per share subject to the approval of shareholders at the Annual General Meeting.

Financial Highlights for the Year Ended December 31, 2012

Income Statement 

§  Gross earnings rose 51% to N68.9 billion (FY 2011: N45.7 billion)
§  Net interest income rose 43% to N23.9 billion  (FY 2011: N16.7 billion)
§  Non-interest income increased 14% to N15.3 billion (FY 2011: N13.4 billion)
§  Net operating income after impairment lossrose 51% to N39.5 billion
(FY 2011: N26.1 billion)
§  Operating expenses increased 56% to N32.0 billion (FY 2011: N20.5 billion)
§  Adjusted for income from discontinued operations (sale of subsidiaries)
      Profit before tax grew 108% to N7.5 billion (FY 2011: N3.6 billion)



Statement of Financial Position

§  Total assets increased 15% to N580.2 billion (Dec. 2011: N504.0 billion)
§  Customer deposits increased 18% to N463.7 billion (Dec. 2011: N392.0 billion)
§  Net loans & advancesgrew 42% to N229.4 billion (Dec. 2011: N162.1 billion)
§  Shareholders’ funds rose14% to N46.6billion(Dec. 2011: N41.1 billion)

Financial Ratios

§  Net interest margin of 5.2% (FY 2011: 5.0%)
§  Non-performing loan ratioof 3.8% (Dec. 2011: 4.8%)
§  Net Loan-to-deposit Ratio of 49.5% (Dec. 2011: 41.3%)
§  Annualized Return on Average Equityof 15.9% (FY 2011: 20.5%)
§  Cost-to-income ratio of 81.0% (FY 2011: 78.4%)
§  Liquidity Ratiostood at 67.3% (Dec. 2011: 64.0%)

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