Lagos, May 14, 2010 – Sterling Bank Plc (NSE Ticker: STERLNBANK/ Reuters: STBP.LG – the “Bank”) today announced audited financial results for the full year ended December 31, 2009, and unaudited results for its first quarter 2010.

Full Year Highlights for 15 Months ended December 31, 2009

  • Gross Earnings rose to N46.7 billion from N36.2 billion (29%) (2006:2009 CAGR 31%)
  • Net Interest Margin increased to N13.4 billion from N12.18 billion (10%)
  • Operating Expenses increased to N22.1 billion from N16.5 billion (34%)
  • Funding Costs doubled to N20.6 billion due to illiquidity in the money markets and rising concern about the state of health of banks
  • Deposits dropped to N160.7 billion from N176.9 billion (-9%) reflecting a renewed focus on balance sheet efficiency given the challenging lending environment
  • Loans & Advances (including contingencies) declined to N108.1 billion from N161.4 billion (-33%) mainly as a result of the difficulty in pricing risk in the aftermath of the CBN intervention
  • Allowances for risk assets climbed to N15.6 billion reflecting a one-time charge arising from the mark to market requirement on share-backed facilities
  • Liquidity position stood at 49.8%
  • Capital Adequacy Ratio (CAR) remained strong at 12% providing a reasonable cushion for risk taking
  • Profit Before Tax and Provisions was N3.9 billion, while Loss After Tax was N9.0 billion as a result of the exceptional credit provisions.
Going into 2009, Sterling Bank anticipated headwinds and took proactive measures to emphasize liquidity conservation. This ensured its resilience through last year’s exceptional conditions, which combined toimpose a significant impairment on earnings.

Sterling Bank is confident that the most difficult phase of the economic uncertainty and regulatory adjustments is over.

The valuable lessons learned in the past year have begun to bear fruit as the first quarter results indicate a rebound on the path to profitability.

Speaking on the results, Yemi Adeola, the Group Managing Director, said that:In the peculiar context of last year’s operating conditions, the preservation of the Sterling Bank franchise was the number one priority. As custodians of the business, we chose long-term safety through liquidity at the temporary opportunity cost of profitability.
Our first quarter results show a marked improvement which leads us to believe that economic conditions are normalizing and confidence is returning.

Notes

  • The full earnings release for FY 2009 and Q1 2010 is available here.
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