Sterling Bank’s net profit grows by 15 per cent, hits N10.6bn

Sterling Bank Plc upgraded its net profit by 15 per cent to N10.6 billion in 2019 due to its steady growths across key performance indicators.

The board of directors of the bank has recommended distribution of N863.7 million as cash dividend for the 2019 business year, representing a dividend per share of 3.0 kobo for all shareholders on the register of the bank as at Monday, May 4, 2020.

Key extracts of the audited report and accounts of Sterling Bank for the year ended December 31, 2019 released at the weekend showed that gross earnings rose from N148.7 billion in 2018 to N150.2 billion. Profit before tax increased from N9.49 billion to N10.67 billion. Profit after tax rose from N9.22 billion in 20189 to N10.6 billion in 2019.

Chief Executive Officer, Sterling Bank Plc, Mr. Abubakar Suleiman, said the bank’s top-line growth was driven majorly by growth in fees and commissions by 24.3 percent, despite a steady loan base – as it continues to diversify into key sectors of focus – and a decline in trading income.

According to him, last year, the bank delivered more than 200 per cent increase in loans to its retail and consumer segment with its Loan-to-Deposit Ratio (LDR) above the regulatory limit all year round.

He noted that the bank’s digital lending product continued to set the trend with more than N45 billion disbursed to more than 50,000 customers.

He pointed out that interest expense declined by 10.9 per cent driven by a 19.4 per cent increase in low-cost deposits as the bank continues to grow its retail and consumer base, resulting in a 110 basis points drop in the cost of funds and consequently, a 130 basis points increase in net interest margin.

He added that the bank’s cost-to-income ratio remained relatively flat during the year even as operating expenses grew on the back of staff salaries and wages and spend on technology infrastructure as well as digital platforms.

Suleiman pointed out that the bank grew its deposit base by over N130 billion in deposit during the 12-month period, representing over 75 per cent growth from its 2018 performance of about N75 billion, while shareholders’ funds grew by 22.2 per cent at the end of the year.

He said investments in technology have allowed the bank to continuously record steady growth in the instant payments market, thus contributing to the bank’s transactional revenue.

“Also, the bank has continued to see traction in machine supported transactions, driven by the adoption of its digital channels. As a direct result, Sterling’s NIBBS Instant Payments (NIP) transaction volume grew by 78 per cent compared to the previous year, faster than the industry growth while recording the fastest growth in fees and commission income in comparison with its peers,” Suleiman said.

Further analysis showed that in comparison with its peers, Sterling Bank delivered the highest percentage growth in terms of savings deposits and second highest in terms of total low-cost deposits.

In the final quarter of last year, the bank’s relentless commitment to improving education through micro banking was rewarded with ‘The Banker’s Award for Banking in the Community’ by the Financial Times of London. The bank was also ranked ‘top three banks in retail’ by Nigerian consumers in a KPMG banking survey.

Golden Guinea Breweries suffered a fire outbreak in 2003 which led to a closure of the plant. Successive governments in Abia State set in motion the ground for its eventual resuscitation.

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