Sterling Bank Plc monday joined banks that have reported profit for the 2015 financial year despite the regulatory headwinds and downturn in the Nigerian economy.
The bank reported a profit before tax of N11 billion in 2015, showing an increase of 2.5 per cent from N10.7 billion recorded in 2015. The profit was made from gross earnings of N110.2 billion in 2015, compared with N103.68 billion in 2014.
Non-interest income grew by 13.7 per cent from N25.7 billion in 2014 to N29.3 billion largely due to a 57 per cent increase in trading income. Confirming the efficiency of the lender’s management, operating expenses decreased by 1.9 per cent from N50.6billion to N49.7 billion.
However, net interest income declined by 8.1 per cent from N43.0 billion to N39.5 billion, driven by an 18.5 per cent increase in interest expense. The bank grew its profit after tax by 14.3 per cent toN11 billion, from N10.3 billion due to a higher retention of organic capital compared to the previous period.
The directors recommended a dividend of N25.9 billion, which is 9 kobo per share.
Commenting on these financial results, the Managing Director/ Chief Executive of Sterling Bank, Mr. Yemi Adeola said: “I am pleased to report that we sustained our performance from the previous year driven by an improvement in operating efficiency. Cost-to-Income Ratio improved by 140 basis points to 72.2 per cent, Capital Adequacy Ratio stood at a record high of 17.5 per cent, while liquidity buffers remained strong as the bank grew its PAT by 14.3 per cent.”
He said the performance offered a clear validation of the underlying resilience of the bank’s business model.
“The very challenging operating environment notwithstanding, we managed to and continue to maintain a delicate balance between delivering on near term goals and laying the foundation for the future that we see – one where our customers enjoy the experiences that we create together, which in turn becomes the basis for our long term profitability,” he said.
He disclosed that asset quality remained resilient with non-performing loans (NPL) below the maximum regulatory threshold of five despite a significant reduction in the loan book, arising from the replacement of state government loans with federal government bonds.
“We also maintained a very liquid balance sheet position despite the implementation of the Treasury Single Account (TSA) by the federal government. This outcome reflects some initial progress with the retail funding strategy and further supports the material investments that we are making in this area,” he said.