Sterling Bank Post N2.4 Billion Profit After Tax in Q1 2021

Sterling Bank Plc grew profit after tax from N2.065 billion recorded in the first quarter (Q1) 2020 to N2.395 billion in the first quarter of 2021.

In the bank’s unaudited financial statement, gross earnings moderated to N31.016 billion in the quarter under review, down from N32.916 billion posted in the corresponding quarter of 2020.

The lender’s operating income rose from N19.968 billion in Q1 2020 to N20.088 billion in Q1 2021, while net operating income after impairment moderated slightly from N18.779 billion in the same quarter of 2020 to N18.321 billion in the quarter under review.

Sterling bank reduced total expenses incurred to N15.816 billion in Q1 2020, down from N16.560 billion in Q1 2021.

Profit before tax stood at N2.505 billion in Q1 2021, up from N2.219 billion achieved in Q1 2020.

Total assets increased to N1.393 trillion in Q1 2021 from N1.299 trillion posted in the final quarter of 2020.

Sterling Bank’s Financial Highlights

• Gross earnings contracted to N31.0 billion primarily due to an 11.0% dip in interest income. This was however moderated by a 27% growth in noninterest revenue.
• We recorded a 15.6% decline in interest expense. This delivered an 80 bps drop in cost of funds as yield on earning assets declined by 210bps. Consequently, net interest margin stood at 7.2%.
• Moderated operating expense further by 4.5% driven by reduction in administrative and depreciation expenses as we continued to optimize our investments across board.
• Customer deposits grew by 9.3% while maintaining a healthy deposit mix of 70.5% in low-cost funding.
• Loans & advances increased by 6.0% YTD to N632.5 billion as cost of risk increased marginally by 10 bps to 0.9%. NPL ratio remained stable at 1.9%.
• Overall the Bank grew its balance sheet by 7.3% to N1.39 trillion and delivered a profit after tax of N2.40 billion in the first quarter of the year.

Commenting on the bank’s performance, Abubakar Suleiman, Chief Executive Officer, Sterling Bank Plc, said “During the quarter, the campaign to vaccinate the global population against COVID-19 gained ground, bolstering consumer and investor confidence. At the macro level, treasury yields, and oil prices retraced towards their historical averages, contributing to reserves accretion and easing the pressure in the foreign exchange markets.

“Riding on the improved operating environment, the bank recorded a year-on-year double-digit growth in profit after tax in the first quarter, aided by a 9.3% rise in customer deposits and a 15.6% decline in funding cost.

“In furtherance of our transformation agenda, we formally launched our digital commodity marketplace, SABEX. This is a product of three years of experimentation and extensive consultation with all key stakeholders and an important component of our strategy to use technology to improve productivity for players across the HEART sectors.

“Overall, we closed with a profit after tax of N2.40 billion in the first quarter of the year, a 16% improvement on the corresponding period in 2020.”