Sterling Bank reports 16% profit growth in 2020
Despite the adverse effect of the COVID-19 pandemic, Sterling Bank Plc, a full service national commercial bank, has reported a Profit Before Tax (PBT) of N12.4 billion. The lender reported the Profit Before Tax on gross earnings of N138.9 billion in the financial year ended 31 December 2020 compared to a PBT of N10.7 billion on gross earnings of N150.2 billion in the same period of 2019, representing a 15.9% growth.
In response to the pandemic and expected credit losses, Sterling Bank proactively increased the cost of risk by 10 bps to 1.0% while moderating the Non-Performing Loan ratio downwards by 30bps to 1.9%.
Commenting on the results, Abubakar Suleiman, Chief Executive Officer (CEO), Sterling Bank, said, “2020 was an extraordinary defined by the global pandemic. COVID-19 disrupted society and severely impacted economic activities. And during the year, we channelled our resources towards empowering our stakeholders to respond to the unprecedented disruption while supporting them to adapt to new banking methods through novel platforms like OneBank and Pay with Specta.”
Reflecting market dynamics influenced by the pandemic, Sterling Bank’s NIBSS Instant Payments and transaction volume grew by 89.4% compared to the previous year on the back of investments in digital platforms. As a result, the Bank achieved a 6.0% growth in profit after taxes to reach N11.2 billion, a development that underpins a 13.5% growth in shareholders’ funds in a pandemic year.
According to Suleiman, the bank’s gross earnings moderated by a 12.4% decline in interest income as yields trended low. Interest expense declined by 21.3%, resulting in a 160 bps drop in the cost of funds; this was driven by a 39.5% year-on-year growth in low-cost customer deposits. The bank also ensured that the cost-to-income ratio declined year-on-year to 77.4% as it recorded a 2.5% drop in operating expenses despite rising inflationary pressures.
Remarkably, Sterling Bank spearheaded efforts to contain the pandemic by encouraging innovation to increase COVID-19 testing capacity. The Bank also supported health care workers on the frontline
