Sterling Bank: Further increase in profit despite challenges
By Philemon Adedeji
Sterling Bank Plc in its audited financial statement for period ended December 31, 2021 released reported increase in gross earnings that eventually impacted on profit.
Such impressive performance on gross earnings because of the increase in profit achieved during the period. Obviously, Profit After Tax recorded in 2021 was higher than that of corresponding year.
It is however worthy of note that the bank’s profitability ratios are still on the right side.
Sterling bank 2021 financial year recorded a slide increase in its gross earnings from 2020 financial result. The bank recorded a 4.8 per cent increase in its gross earnings, what this means is that the rate of sale rose better than it did in the preceding year. Such gross earnings rose significantly to N142.3 billion up from N135.8 billion in the preceding year. It is worthy of note that this 4.8 per cent growth rate, even though is a bit low, is still good performance when comparing with the bank average for the same period under review.
The total asset deployed during the period stood at the sum of N1.629 trillion in 2021 from N1.299 trillion in 2020, reflecting an increase of 25.4 per cent.
The total liabilities deployed by the bank for the 2921 year grew to N1.487 trillion, 27.8 per cent more than the N1.163trillion liabilities deployed in 2020.
Sterling Bank during the period under review reported a profit before income tax (PBT) expense that increased to N24.474 billion as against N12.372 billion made in prior period, reflecting a growth of 16.9 per cent.
The bank reported Profit After Tax (PAT) increase toN13.515 billion in 2021, representing an increase of 20.2 per cent from N11.242 billion recorded in 2020.
Earnings per share recorded during the period increased to a 20.5 per cent to 47 kobo in the previous year from 39kobo recorded in corresponding year
However, net fees and commission income rose by 47 per cent to N19.36 billion in 2021 from N13.087 billion recorded in 2020.
Sterling Bank reported N87.304 billion net operating incomes after credit loss expenses in previous year of 2021 from N78.624 billion reported in the corresponding period of 2020, representing an increase of 11 per cent.
Therefore, Operating Income gained 12.2 percent to N97.13 billion in 2021 from N86.53 billion in 2020, On Total Expenses ,the bank declared 9.9 per cent increase in 2021 financial year to N72.83billion from N66.252 billion recorded in 2020.
The bank had reported an impressive result and dividend payout to shareholders in the 2021 financial year.
From the Balance Sheet position, the bank grew its Customer deposits base year to date grew by 21.7 percent to N1.208trillion in 2021 from N950.8 billion reported in 2020 full year audited results and accounts for the period ended 31st, December 2021, with an improvement in cost-to-income ratios, despite an increase in operating expenses brought about by foreign exchange inflationary pressures.
Profitability Ratios
At a glance in the analysis, Sterling Bank recorded profitability for the 2021 financial year. However, when compared to its preceding years’ result, almost all the parameters show an impression. First to achieve the profit margin of the bank, appreciating to 9.5 per cent in 2021 from 8.3 per cent in 2020, what this signified is that for every N100 earned by the bank in the course of the year, N9.50 of it can be translated to profit higher than N8.30 of the preceding year
Commenting on the bank’s financial performance, Chairman of the Bank’s Board, Mr. Asue Ighodalo said, “For us and for the nation at large, 2021 was a year of recovery from the adverse economic effects of the corona virus pandemic.” He added that, “Breakthroughs in the development of vaccines for the virus, along with the campaigns to inoculate the global population gained ground and bolstered consumer and investor confidence globally and locally. The pace of economic recovery exceeded expectations despite threats of a third wave and the emergence of variants of the virus. This brought wind to our sails as we navigated the Bank to increase her profitability and growth.
“During the period, we were consistent with our strategy to drive financial intermediation in high impact sectors that aligned with our HEART strategy. This enabled us to focus and deliver innovative solutions that enabled our customers to thrive in a dynamic environment. We are unwavering in our commitment to build a forward-thinking organization focused on delivering the best value to our stakeholders.”
Reflecting on key drivers of the performance, Sterling’s Chief Executive, Abubakar Suleiman, noted that the year’s success was driven by a growth of 28.5 percent in non-interest-income and a 51.4 percent increase in transaction volumes processed – significant numbers that illustrate the effectiveness of the Bank’s recent digitisation efforts.
“We will continue to focus on our HEART strategy, optimise our expenses and lending while strengthening our risk management and recovery practices.
“These have remarkably improved our exposure with non-performing loans dropping from 1.9 per cent in 2020 to 0.7 per cent in 2021. Put together, these have enabled us increase shareholder funds by 4.2per cent,” Suleiman noted.
On other non-financial highlights, Sterling Bank was awarded the 2021 People First Organisation by the Chartered Institute of Personnel Management of Nigeria (CIPM) and continued to push the edge with innovative solutions like Pay With Spect a delivered to drive small-business productivity and real-sector growth. The bank also commenced on the largest commercial property solar project in Africa with the remodeling of her Marina headquarters with building installed photovoltaic (BIPV) panels. This will power Sterling’s head office with solar energy and make Sterling Towers the first building in Africa to achieve the feat.
Sterling Bank commenced its operations as NAL Bank in 1960. Presently, with 141 business offices and 700 ATMs nationwide, the bank has grown into a major financial institution.
It is engaged in commercial banking services with emphasis on retail, commercial and corporate banking, trade services, investment banking activities and non-interest banking. It also provides wholesale banking services, including granting of loans and advances; letter of credit transactions, money market operations, electronic banking products and other banking activities.
