By Peter Egwuatu
Investors in Sterling Bank Plc had a  rewarding 2010 as  the bank’s shares led others in the banking sector to close the  year as the highest price  gainer.

The equity recorded a price  appreciation of  87.8 per cent, rising from N1.23 at the  beginning of the year  to close at N2.31 per share. This translates into a capital  gain of N1.08.

Market analysts said this is a very  impressive  performance considering the fact that some of the  equities of other banks posted negative growth.

Besides, the 87.8  per cent growth posted  by the bank, Sterling Bank outperformed the 18.9 per cent positive return the Nigerian Stock Exchange (NSE) All-Share   Index recorded and the 25.3 per cent growth the NSE Banking Index achieved last year.
The bank that got closest to  Sterling  Bank in terms of capital appreciation last year was  Skye Bank Plc, which rose  by 60.2 per cent.

Oceanic  Bank International Plc appreciated by 47.9 per cent, while Unity Bank Plc went up  by 42.8 per cent. Wema  Bank Plc,  FinBank Plc, Intercontinental  Bank Plc and Bank PHB  Plc advanced by 38 per cent, 37.7  per cent, 34.1 per cent and 32.5 per
cent among others.

Financial  analysts said that the growth  posted by Sterling Bank  shares was due to  high demand informed by  investors’ confidence in the ability of the Bank to give them good  returns in the future.Others also  attributed the stellar  performance of the Bank to the stability of its Board and Management.

The Bank had in its third quarter  ended September 30,  2010 posted a profit after tax of N5.3  billion compared with a loss  of N6.2 billion in the corresponding period of 2009. An  analysis of the results of the  bank in the nine months showed  improvements in many performance  ratios. For instance,  cost-to-income ratio (including allowances for risk assets) dropped  59 per cent from 151 per cent in  2009 to 62 per cent as a result  of improvement in interest  margins and loan recoveries.

The  bank’s  allowances for Risk Assets stood in the positive region of N2.5 billion in contrast to negative N8.9 billion in the prior period   demonstrating performance  improvement in loan assets and  progress in loan recovery  efforts.

Balance  Sheet size grew  26 per cent from N221.3 billion in December 2009  to N279.3  billion spurred by moderately favourable economic  conditions, just as deposits grew by 21 per cent from N161.3  billion in December 2009 to  N195.7 billion. Liquidity ratio was 42.9  per cent, Capital Adequacy  Ratio (unaudited) was 15 per cent just as annualised  return on average  equity was 30 per cent.