Sterling Bank Grows Profit After Tax by 15% to N10.6bn

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CAPITAL MARKET

By Goddy Egene

Sterling Bank Plc has announced its audited results for the year ended December 31, 2019, showing higher top and bottom lines. Gross earnings stood at N150.2 billion, up from N148.7 billion in 2018. Profit after tax (PAT) rose from N9.2 billion to N10.6 billion in 2019, showing an increase of 15 per cent.

Commenting on the financial performance, the Chief Executive Officer (CEO) of Sterling Bank Plc, Abubakar Suleiman, said the bank recorded an increase in gross earnings, driven majorly by growth in fees and commissions by 24.3 per cent, despite a steady loan base – as it continues to diversify into key sectors of focus – and a decline in trading income.

According to him, in 2019, 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.

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

“Also, 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 & consumer base, resulting in a 110 bps drop in the cost of funds and consequently, a 130 bps increase in net interest margin,” he said.

According to the CEO, the bank’s cost-to-income ratio remained relatively flat year-on-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 said the bank grew its deposit base by over N130 billion in deposits representing over 75 per cent growth from its 2018 performance of about N75billion, and shareholders’ funds grew by 22.2 per cent at the end of the year.

He also noted that investments in technology have also allowed the bank to continuously record steady growth in the instant payments market 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 percent compared to the previous year, faster than the industry growth while recording the fastest growth in Fees & Commission income in comparison with its peers