Sterling Bank’s gross earnings rise by 19% in Q3

Sterling Bank Plc has recorded sustained growth in income with 19 per cent increase in gross earnings for the third quarter (Q3) ended September 30, 2017, boosted by 48.9 per cent increase in non-interest income.

The bank’s gross earnings rose to N94.6billion in Q3 against N79.7billion year-on-year. Other performance indicators showed that non-interest income grew by 48.9 per cent to N16.0billion against N10.8billion recorded in 2016.

Commenting on the performance, the bank’s Managing Director/Chief Executive Officer, Yemi Adeola, said: “In the third quarter, the bank sustained its earnings growth momentum with an 18.8 per cent growth in gross earnings boosted by a 48.9 per cent increase in non-interest income.”

He noted that the bank’s strategy, built on efficient operations and sustainable growth of its balance sheet in a cautious but optimistic manner, continued to deliver results.

According to him, despite the persistent inflationary pressures, cost-to-income ratio improved by 140 basis points driven by a moderation in operating expenses, thereby enabling the Bank to record significant improvement in asset quality with a 380-basis point reduction in non-performing loan (NPL) ratio.

He also said the Bank continued to diversify its funding base leading to a 147.6 per cent increase in long-term funding and that overall profit before tax rose by 8.1 per cent to N6.6billion while annualised pre-tax return on average equity improved by 50 basis points to 9.6 per cent.

Adeola further noted: “As economic recovery gains momentum, we are well positioned to respond to emerging opportunities in education, health and transportation sectors. Our existing collaboration with pioneering technology companies in these sectors has started yielding results and this will provide a springboard for growth in 2018.”

Further analysis showed that net operating income increased by 0.5 per cent to N45.3 billion compared with N45.1 billion in 2016.
Operating expenses however moderated by 0.6 per cent to N38.8 billion as against N39 billion in 2016; profit before tax rose by 8.1 per cent to N6.6 billion against N6.1 billion in 2016, while profit after tax also appreciated by 7.3 per cent to close the quarter at N5.9 billion compared with N5.5 billion a year earlier.

The bank’s financial ratios showed pre-tax return on average equity of 9.6 per cent compared with 9.1 per cent in 2016. Post tax return on average equity was 8.6 per cent against 8.3 per cent last year, while earnings per share rose to 21 kobo in 2017 from 19 kobo in 2016.

Sterling Bank’s non-performing loan ratio dropped to 6.1 per cent in 2017 from 9.9 per cent in 2016, while capital adequacy ratio increased to 11.4 per cent in 2017 from 11.2 per cent in 2016.

The financial position statement of the bank showed that shareholders’ funds rose by 13.6 per cent to N97.3 billion against N85.7 billion in 2016, while total assets, excluding contingent liabilities, increased by 15.2 per cent to N961billion against N834.2 billion in 2016.