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Sterling Bank grows profit by 91%

Sterling Bank Plc achieved impressive growths in profitability in the third quarter as aggressive business development initiatives and better credit risks management improved the balance sheet position of the bank.

The bank’s third quarter report for the nine-month period ended September 30, 2011 showed that profit from ordinary activities grew by 91 per cent to N2.9 billion as against N1.5 billion recorded in the comparable period of 2010.

The report indicated that gross earnings grew by 21 per cent while the proportion of non-performing loans to gross loans improved to 3.9 per cent as against 11.5 per cent in December 2010, reflecting the efficiency of the bank’s credit risk management framework, which significantly reduced non-performing assets in spite of 28 per cent growth in loans during the period.

At 3.9 per cent, Sterling Bank’s non-performing loan/gross loans ratio has surpassed the industry target of 5.0 per cent, a trend that the bank’s management said it would sustain.

The nine-month report   also showed  gross earnings of N28.04 billion while pre and post-tax profits stood at N3.94 billion and N3.68 billion respectively. With earnings per share at 29 kobo, the nine-month earnings outlook indicated earnings yield of about 21 per cent; a strong indication of high dividend yield by the end of the year.

The report also indicated 14 per cent increase in total balance sheet size to N314.01 billion as against N277.11 billion in December 2010 while total capital rose from N26.12 billion to N37.31 billion.

Commenting on the third quarter report, Group Managing Director/CEO, Sterling Bank, Mr Yemi Adeola said the performance of the bank showed its underlying strengths assuring that directors of the bank were confident they would sustain the performance.

According to him, in a challenging operating environment marked by difficult global and local macro-economic conditions, the improvement in profitability of the bank further demonstrated the underlying strength of its core business.

He noted that the growth in loans and reduction in non-performing assets were in alignment with the bank’s objective to grow risk assets as the economy rebounds while focusing on quality growth.

He pointed out that the acquisition of Equitorial Trust Bank would complement Sterling Bank’s business and allows it to increase its foot print in the retail segment given a combined branch network of 189 and 64 additional branches at various stages of completion.

“Looking to the final quarter of 2011, the Board of Sterling Bank is optimistic that our performance in preceding quarters will be sustained and surpassed,” Adeola assured.


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