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Sterling Bank Reports N5.4bn Half-Year Net Profit

 Sterling Bank Plc has reported a net interest income of N33.5 billion during the half-year ended June 30, 2020, as against N30.4bn during the corresponding period of 2019, representing a growth of 10.1%.

During the period, the bank delivered a profit after tax of N5.4bn on gross earnings of N70.2bn in the first half of 2020, as against the N5.7bn reported on gross earnings of N72.3bn during the corresponding period of 2019.

The bank’s total assets also rose by 9.4% to N1.294tr during the review period from N.182tr in 2019 while customer deposits inched up by 2.5% to N915.2bn in 2020 from N892.7bn in 2019.

The lender closed the half-year with a trading income of N3.9bn as against N1.2bn for the corresponding period of 2019, representing a remarkable increase of 242.8%.

Commenting on the financial performance, the bank’s Chief Executive, Abubakar Suleiman said “our impressive half-year performance in the face of the COVID-19 pandemic and the ensuing economic disruption belies the rough seas ahead. In the second quarter of the reporting period, we focused on empowering our stakeholders to respond to the unprecedented disruption occasioned by prolonged restriction to movement while supporting them to adapt to new ways of banking. 

“Our commitment to digitisation was validated as we continued to serve existing and new customers through our mobile and digital platforms. We also responded to the uncertainty by doubling down on cost optimisation while leveraging our existing remote work policy to keep our workforce productive without risking COVID-19 infection. Notwithstanding rising inflation, we were able to moderate operating expenses during H1 2020 to deliver a net profit comparable to the first half of 2019.

“In the second half of the year, our focus remains the same; retooling our employees to function optimally while observing social distancing, enhancing our execution capacity and enabling our customers to thrive in the middle of a pandemic. We will continue to focus on the sectors that are critical to the well-being of the economy, or as we call it, the HEART sectors namely: Health, Education, Agriculture, Renewable Energy and Transportation.” 

He observed that the contracted gross earnings was primarily due to a dip in fees and commission as a result of a downward review of electronic banking fees.

Suleiman noted that although interest income declined by 4.3%, this was offset by an 18.1% decline in interest expense, thereby delivering a 130 bps drop in cost of funds and consequently, a 60-bps reduction in net interest margin.

He said, “in terms of asset quality, non-performing loan (NPL) ratio was flat at 2.1 percent while cost of risk went up by 140 bps to 2.1 percent and operating, expenses declined by 0.1 percent, achieved by moderating administrative expenses despite growth in other operating expenses including AMCON and insurance fees. The bank was able to maintain a strong capital and liquidity position of 15.2 percent and 33.5 percent respectively above the regulatory benchmark.”

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