By Grace KehindeSterling bank Plc grew profit after tax by 40.8per cent to N8.0billion in unaudited half year (H1) ended June 30, 2022 from N5.7billion reported in prior half year ended June 30, 2021. The growth in profit after tax was driven by two key components that consist of significant increase in gross earnings, non-interest income and net interest income. With the impressive half year performance, investors expect a high over 2022 financial year dividend payout. The board of Sterling bank had proposed and was approved by shareholders a N0.10 kobo for every share of 50 kobo dividend payout for the financial year ended December 31, 2021.Shareholders in the 2020 financial year had approved N0.05 kobo for every share of 50 kobo dividend payout. The lender grew gross earnings by 16.5 per cent to N78.4billion in H1 2022 from N67.3billion in H1 2021. While non-interest income grew by 48.2 per cent to N19.3billion in H1 2022 from N13billion in H1 2022, net interest income grew by 8.7 per cent to N33.7billion in H1 2022 from N30.99billion in H1 2021. The breakdown of net interest income showed a 8.9 per cent growth in interest income to N59.06billion in H1 2022 from N54.22billion as the management grew loans & advances to customers amid hike in banking sector interest rate. Also, interest expenses grew by 9.1 per cent to N25.36billion in H1 2022 from N23.24billion in H1 2021, driven by interest paid on corporate & investment banking that was at N12.5billion in the period under review from N12.93billion reported in corresponding period. Sterling bank recorded N10.5billion net fees and commission income in H1 2022 from N8.37billion in H1 2021 and the growth in the period was a factor of facility management fees, Account maintenance fee and Electronic-business commission and fees.As credit loss expense on financial assets moved from N3.8billion in H1 2021 to N4.08billion in H1 2022, Net operating income after impairment closed H1 2022 at N48.95billion from N4.0.23billion reported in H1 2021. In the period under review, Sterling Bank grew operating expenses by 18 per cent to N40.3billion in H1 2022 from N34.2billion in H1 2021, driven by an increase in other operating expenses and other property, plant, and equipment costs such as the repairs and maintenance of PPE.Sterling bank maintains stronger liquidity The bank maintained a strong capital and liquidity position recording 14.4 per cent and 31.3per cent respectively above regulatory benchmark. From the balance sheet position, Sterling Bank grew its balance sheet by 11.4per cent to N1.8 trillion as of June 30, 2022 from N1.63 trillion reported in 2021 full financial year.The bank recorded a growth in total deposits by 1.6per cent to N1.23trillion as of June 30, 2022 from N1.21trillion reported in 2021 FY and 8.7per cent YTD growth in low-cost funds which improved our CASA mix to 72.9per cent from 68.1per cent (2021 FY).The lender’s deposit from customers gained nearly two per cent to N1.23billion as of June 30, 2022 from N1.21trillion reported in 2021 FY. In terms of asset quality, Non-Performing Loan (NPL) increased to 1.1 per cent while the cost of risk ratio remained flat at 0.9 per cent.Sterling bank to enhance execution capabilities to deliver solutions- SuleimanThe Chief Executive Officer, Sterling Bank, Abubakar Suleiman in a statement said “The macro-economic environment continues to be pressured by global supply chain disruptions which had resulted in rising inflation. “At Sterling Bank, we continue to look for ways to alleviate the challenges experienced by our stakeholders through our sustainable banking practices and innovative products. We launched the first Africa Social Impact Summit and unveiled the LAGID partnership, the first state smart ID card product in West Africa.“Our Half-year results reaffirm our growth strategy and diversified business model. We continue to enrich the lives of our stakeholders and have created investment platforms that enable customers create wealth by accessing high-quality assets like luxury real estate, infrastructure bonds and precious metals. “In the second half of the year, we will continue to enhance our execution capabilities to deliver solutions that will enable our stakeholders thrive in a dynamic environment.”“Overall, the bank delivered a profit after tax of N8.0billion in the first half of the year, a 40.8per cent improvement on the corresponding period in 2021.” Commenting on the bank’s 2021 performance, the chairman of Sterling Bank, Mr. Asue Ighodalo said, “For us and for the nation at large, 2021 was a year of recovery from the adverse economic effects of the coronavirus pandemic.”He added that, “Breakthroughs in the development of vaccines for the virus, along with the campaigns to inoculate the global population gained ground and bolstered consumer and investor confidence globally and locally.“The pace of economic recovery exceeded expectations despite threats of a third wave and the emergence of variants of the virus. This brought wind to our sails as we navigated the Bank to increase her profitability and growth.”“During the period, we were consistent with our strategy to drive financial intermediation in high impact sectors that aligned with our HEART strategy. This enabled us to focus and deliver innovative solutions that enabled our customers to thrive in a dynamic environment.“We are unwavering in our commitment to build a forward-thinking organization focused on delivering the best value to our stakeholders.”Reflecting on key drivers of the performance, Suleiman, noted that the year’s success was driven by a growth of 28.5 per cent in non-interest-income and a 51.4 per cent increase in transaction volumes processed – significant numbers that illustrate the effectiveness of the Bank’s recent digitization efforts.Customer deposits grew by 21.7 per cent from the previous year’s numbers, with an improvement in cost-to-income ratios, despite an increase in operating expenses brought about by foreign exchange inflationary pressures.“We will continue to focus on our HEART strategy, optimize our expenses and lending while strengthening our risk management and recovery practices. These have remarkably improved our exposure with non-performing loans dropping from 1.9 per cent in 2020 to 0.7 per cent in 2021. Put together, these have enabled us increase shareholder funds by 4.2per cent,” Suleiman added.
