Sterling Bank increases gross earnings by 20% ,declares 2kobo cash dividend
Kayode Ogunwale


Sterling Bank Plc 2017 financial year results released to the Nigerian Stock Exchange (NSE) today in Lagos showed growth across major line items, save for the net interest income which recorded a decline in the full year.
Gross earnings of the bank grew by 19.79 percent to N133.49 billion, while profit before tax and profit after tax increased by 43.47 percent and 65.12 percent to N8.61 billion and N8.52 billion respectively.
The 19.79 percent upturn in gross earnings was largely driven by the 87.84 percent surge in NIR, which muted 10.37 percent decline in net interest income. A faster pace of increase in the interest expense (+39.48 percent) to N60.14 billion, than in interest income (+11.32 percent), drove the decline in Net interest income. Interests paid on customer deposits and on debt securities and borrowed funds were 30.43 percent and 205.35 percent higher than the previous year. As a result, NIM dropped by 251 basis points to 2.51 percent, with yield on interest bearing assets lower by 196 basis points to 14.30 percent and cost of funds 106 basis points higher at 7.39 percent.
Growth in the NIR stems from the significant increase in the Net trading income to N4.67 billion, from N235 million in 2016. Gains on foreign exchange trading was 3.10x the value in the previous year, while loss on bond trading was reduced to -N0.58 billion (vs. -N3.31 billion). On the flip side, gains on T-bills instruments was lower by 26.43 percent at N1.78 billion. N4.66 billion was reported as cash recoveries on previously written off accounts, from N447 million in 2016, significantly buoying the growth recorded in other income.
Loan and Impairment charges inched 4.72 percent higher than the N11.71 billion in 2016, to N12.27 billion, while loans to customers increased by 27.73 percent to N598.07 billion. As a result, cost of risk dipped 47 bps to 2.09 percent.
OPEX remained tapered in the year, with 3.69 percent (2016: +1.92 percent) increase to N52.48 billion, following 19.04 percent increase in depreciation and amortization charges, as well as marginal upticks by 0.20 percent and 2.99 percent in personnel and other operating expenses respectively.
Tax charge in the year was significantly lower by 89.86 percent buoying growth in the bottom line, with pre and post-tax profits higher by 43.47 percent and 65.12 percent respectively.
In fourth quarter 2017, gross earnings grew (+3.44 percent quarter on quarter, +22.19 percent year on year) to N38.84 billion, as the 33.50 percent quarter on quarter (-8.49 percent year on year ) growth in net income muted the 20 percent quarter on quarter (+353.71 percent year on year) decline in NIR. Contrary to the full year’s performance, the net trading income dropped by 51.92 percent from the previous quarter, and 294.55 percent lower from the previous year.
Loan impairment charges (+30.59 percent, +2.66 percent) in the quarter increased to N4.64 billion. Total opex also grew by 4.84 percent quarter on quarter and 18.21 percent year on year to N13.72 billion in the period.
The bank recorded a pre-tax profit of N2.04 billion in the quarter, from a loss of N73 million in the same period of 2016. A tax credit of N573 million was recorded in the quarter, driving the 24.44 percent growth of profit after tax in the quarter to N2.62 billion, loss of N377 million in the previous year.
The lender however declared 2 kobo per share as dividend for its shareholders which is subjected to their approval at the next annual general meeting of the bank.