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Sterling Bank’s Q1 profit rises by 25%

By on April 22, 2015

Sterling Bank Plc witnessed a 25 per cent increase in its profit after tax for the first quarter of the 2015, its unaudited results for the period ended March 31, 2015 showed.

The results, which the lender released on the floor of the Nigerian Stock Exchange on Monday, indicated growth in all key performance indices with the bank’s profit after tax rising from N3.1bn to N3.9bn year-on-year.

Similarly, Sterling Bank’s profit before tax rose by 14.1 per cent from the N3.5bn it declared in the first quarter of 2013 to N4.0bn in the review period, while non-interest income grew by 31.9 per cent from N6.1bn to N8bn.

According to the bank, the growth in non-interest income was driven by a 51 per cent growth in fees and commission, which rose to N5bn.

Meanwhile, the bank’s net operating income edged up by 6.1 per cent from N15.3bn to N16.2bn on the back of a growth in non-interest income and a 10.4 per cent reduction in impairment charges.

Net loans and advances also increased by 5.7 per cent from N371.2bn to N392.4.0bn due to the lender’s selective approach to asset creation.

Also, shareholders’ funds increased marginally by 4.3 per cent from N84.7bn to N88.4bn due to profit accretion, while the total assets, excluding contingent liabilities, advanced by 2.1 per cent from N824.5bn to N841.9bn.

A statement from the bank following the release of the results said that the first quarter performance demonstrated the lender’s ability to sustain its growth despite industry headwinds.

It quoted the Managing Director and Chief Executive officer, Sterling Bank, Yemi Adeola, as saying during the bank’s quarterly update to investors and analysts that the performance was in line with expectations.

He said, “Our first quarter performance was in line with expectations, having recorded a 25 per cent growth in bottom-line earnings. This was driven by non-interest income, which rose by 32 per cent to N8bn on the back of a 51 per cent increase in fees and commission.

“We recorded a marginal increase in operating expenses, which was slower than the growth in net operating income resulting in a 14 per cent improvement in profit before tax. Overall, the bank achieved a 19 per cent pre-tax return on average equity (annualised).”

The Sterling Bank MD added that during the period, the lender achieved a return on average assets of two per cent by prioritising efficiency in the management of its balance sheet in response to a difficult operating environment.

“Loan growth will remain steady and disciplined. We are very optimistic that our earnings growth momentum will be sustained in the remaining quarters of the year, ” he said.

 

[Punch]