July 31, 2019
By InvestAdvocate
Lagos (INVESTADVOCATE)-
Sterling Bank Plc said on Wednesday its post-tax profit for the half year (HI) period ended June 30, 2019 dropped -8.9 percent to N5.66 billion from N6.21 billion posted a year ago.
While pretax profit depreciated 5.7 percent to N6.00 billion from N6.36 billion declared in the same period of 2018.
Gross earnings of Sterling Bank dipped from N77.60 billion in 2018 HI period end to N74.49 billion in the review period of 2019; showing a decline of 4.0 percent, the lender said in a filing with the Nigerian Stock Exchange (NSE).
“Underlying our half year performance was a concerted effort in improving the quality of our funding base, increasingly through digital products and initiatives. Though top line earnings were impacted by a selective approach to lending, the Bank remained focused on building a sustainable business model and continued to see considerable improvement across business lines, particularly our retail & Consumer and digital & transactional banking businesses. Overall the Bank recorded a 5.5% improvement in operating income and a profit after tax of N5.66 billion,” Abubakar Suleiman chief executive officer of the bank said in a statement.
Financial performance highlights
- Contracted gross earnings primarily due to a 77% dip in trading income, despite a 41% growth in fees and commission.
- While interest income remained flat, we recorded a 14% decline in interest expense. This delivered a 170 bps drop in cost of funds and, consequently, a 131 bps increase in net interest margin.
- Achieved a 14.5% growth in low cost funds, delivering a 7.6% growth in customer deposits.
- Net operating income grew by 4.3%, despite a 32% growth in credit losses as cost of risk remained relatively stable at 0.7%.
- We continued to see a rise in personal costs (Up 14%) owing to commitment to intensify strategy execution. Overall OPEX grew by 6.1%.
- A continuous growth in retained earnings delivered a 12.7% increase in shareholders funds to N110.1 billion.
- Overall the Bank grew its balance sheet by 5% to N1.15 trillion and delivered a profit after tax of N5.66 billion in the first half of the year.
