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Sterling Bank, GTB’s half-year profits rise

By on August 22, 2015

Sterling Bank Plc and Guaranty Trust Bank Plc on Thursday filed their results for the half year ended June 30, 2015 with the Nigerian Stock Exchange with both banks reporting increases in earnings and profits.

Sterling Bank’s half-year results showed that its gross earnings rose by 11.45 per cent from N49.386bn to N55.042bn.

The bank’s profit before tax was up by 1.43 per cent from N5.970bn in the first half of the 2014 financial year to N6.055bn in the review period, while its profit after tax jumped by 6.39 per cent from N5.073bn to N5.425bn.

In a statement on Thursday, Sterling Bank explained that the increase in its earnings was driven by a 32.2 per cent increase in non-interest income to N15.2bn from the N11.4bn reported in the corresponding period of 2014.

The bank noted that its operating expenses were relatively flat at N24.2bn (the figure was 24.1bn in the corresponding period a year ago), leading to an improvement in cost-to-income ratio.

The bank’s balance sheet came in stronger with shareholders’ funds increasing by 4.4 per cent to N88.4bn as against N84.7bn in 2014.

Total assets (excluding contingent liabilities) increased by 1.2 per cent to N834bn as against N824.5bn in 2014.

The Managing Director, Sterling Bank, Mr. Yemi Adeola, was quoted as saying that the performance further validated the bank’s resilience in the face of regulatory and other macroeconomic headwinds.

Adeola, who described the progress made by the bank as steady, said, “We prioritised performance optimisation and operational efficiency leading to a 260-basis points improvement in cost-to-income ratio.

“We also achieved pre-tax Return on Average Equity of 14 per cent with a double-digit growth in top-line earnings. Our capital position remained strong with capital adequacy ratio at 15 per cent, 50 per cent higher than the regulatory benchmark.”

For the remaining half of the year, the Sterling Bank CEO said the bank would complete the ongoing implementation of a number of technology-led service improvement initiatives across core and subsidiary systems in order to improve operating efficiency and employee productivity.

“Furthermore, we remain confident that we will complete the final tranche of our capital program in order to build additional resilience in view of the prevailing difficult macro-economic conditions while also strengthening earnings capacity,” he added.

GTB on its part grew its gross earnings by 15 per cent from N132.985bn to N152.995bn.

Despite a nine per cent increase in operating expenses and an 11 per cent rise in loan loss expenses, GTB’s profits rose significantly.

Its profit before tax appreciated by 18 per cent in the half year ended June 30, 2015 to N63.112bn from the N53.396bn it reported in the corresponding period of 2014.

In the same vein, albeit at a greater margin, GTB’s profit after tax rose by 21 per cent from N44.008bn to 53.373bn.

GTB had made a profit after tax of N26.56bn in the first quarter of the year, 15 per cent higher than the N23.11bn it posted for the same quarter of 2014.

Also in the first quarter, the bank made a profit before tax of N31.65bn, indicating a 17 per cent increase on the N28.01bn reported in Q1 2014, while its gross earnings rose by 17 per cent from N67.58bn to N79.02bn.

Following the release of the Q1 results, the Managing Director and Chief Executive Officer, GTB, Mr. Segun Agbaje, was quoted as saying, “A major focus for the bank this year is to strengthen market positions with distinctive customer propositions in chosen segments in order to deliver long-term sustainable and efficient growth as well as strong shareholder returns.”

 

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