Sterling bank reports 16% increase in profit

Sterling Bank plc has reported 16 per cent increase in profit to N2.4billion in first quarter (Q1) ended March 31, 2021 as against N2.1billion reported in first quarter of 2020.

The lender also reported 5.8 per cent decline in gross earnings to N31billion in Q1 2021 from N32.9billion reported in Q1 2020.

According to the bank, the decline in Gross earnings was primarily due to an 11per cent dip in interest income.

The bank in a statement explained that, “This was however moderated by a 27per cent growth in noninterest revenue.

“We recorded a 15.6per cent decline in interest expense. This delivered an 80 basis points drop in cost of funds as yield on earning assets declined by 210basis points.

“Consequently, net interest margin stood at 7.2 per cent. Moderated operating expense further by 4.5 per cent driven by reduction in administrative and depreciation expenses as we continued to optimize our investments across board.

“Customer deposits grew by 9.3 per cent while maintaining a healthy deposit mix of 70.5 per cent in low-cost funding. Loans & advances increased by six per cent YTD to N632.5 billion as cost of risk increased marginally by 10 basis points to 0.9per cent. NPL ratio remained stable at 1.9per cent.

“Overall the Bank grew its balance sheet by 7.3per cent to N1.39 trillion and delivered a profit after tax of N2.40 billion in the first quarter of the year.”

The Chief Executive Officer, Sterling Bank, Abubakar Suleiman in a statement 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 9.3per cent rise in customer deposits and a 15.6 per cent 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 16per cent improvement on the corresponding period in 2020.”