Sterling Bank Plc has declared a Profit after Tax (PAT) of N5.3 billion for the third quarter (Q3) ended September 2010, compared with a loss after tax of N6.2 billion the comparable period of 2009.
The result presented on the floor of the Nigerian Stock Exchange (NSE) yesterday, showed that the bank’s gross earnings slipped by 13 per cent to N23.1 billion in the period under review, from N26.6 billion in September 2009. This, the bank attributed to the adoption of a lower interest rate regime.
Similarly, the result showed that the bank’s funding costs dropped by 38 per cent to N8.1 billion from N13.0 billion in the comparable period of 2009, as a result of a 20 per cent improvement in its Net Interest Margins. Its operating expenses remained stable at N11.9 billion.
A report from the bank’s Head, Brand Management and Communications, Mrs. Bimbola Sowemimo, yesterday, further revealed that bank’s balance sheet size grew by 26 per cent from N221.3 billion in December 2009 to N279.3 billion at the end of Q3 this year.
It disclosed that the upward trend observed in the balance sheet was spurred by a moderately favourable economic condition.
The report added, “Deposit grew by 21 per cent from N161.3 billion in December 2009 to N195.7 billion, while Net Loans and Advances (including Advances under Finance Lease) increased by 9 per cent to N90.5 billion from N82.9 billion recorded in December 2009. Liquidity ratio stood at 42.9 per cent, just as Capital Adequacy Ratio (unaudited) climbed to 15 per cent. Earnings per Share (EPS) was 43k compared to (54) k in the prior period.”
The report also quoted the Managing Director and Chief Executive Officer, Sterling Bank, Mr. Yemi Adeola, to have said that the bank plans to accelerate deposit mobilization and increase the pace of its loan growth.
Adeola added, “We also intend to intensify our loan recovery efforts. All these are also expected to consolidate the gains of the first nine months.
The Bank is also exploring a number of strategic options to raise capital, which will be announced in due course.”
In his review of the bank’s Q3 activities, the Sterling Bank boss said the bank maintained a healthy performance in the first nine months, saying that the feat was supported by a boost in earnings from steady growth in interest margins and write back from credit provisions.
“During the year, the Bank’s strategy was built on careful asset selection; loan recovery and discretionary cost containment have delivered consistently attractive results. Our credit expansion was directed at the Small and Medium Enterprises (SMEs) segment while banking relationships with corporate clients were deepened.
“While scale has become imperative under the emerging banking dispensation, Sterling Bank emphasis on efficiency and profitability has been the cornerstone of its performance in the third quarter.” Adeola explained.
Speaking on the bank’s performance, Sterling Bank’s Executive Director, Mallam Garba Imam, was also quoted to have commended the achievement of the first nine months.
Iman noted that: “As the transition in the Nigerian banking sector unfolds, both on the regulatory and business sides, Sterling Bank’s size gives us the advantage of making changes quickly across board where necessary and seizing emerging opportunities as they appear.”
The bank disclosed that it kept discretionary cost in tight check while new strategies were introduced at the beginning of the year continue to further curtail cost. It also revealed that it had been appointed as a primary lending Institution (PLI) under the Cabotage Vessel Financing Index (CVFI) scheme by the Nigerian Maritime Administration and Safety Agency (NIMASA).