Sterling Bank Plc recorded impressive growths in the top-line and bottom-line in the third quarter as the bank’s continued to optimize the potential of its core banking operations and overall profitability of its business.
Interim report and accounts of the bank for the third quarter ended September 30, 2014 showed that while gross earnings grew by 12.1 percent, net interest income rose by 32.8 percent. This further bloomed into 41.3 percent and 39.2 percent in pre and post-tax profits respectively.
Gross earnings closed September 2014 at N73.01 billion as against N65.12 billion recorded in comparable period of 2013. Net interest income rose from N24.22 billion in third quarter 2013 to N32.1 billion in third quarter 2014. Profit before tax jumped to N8.50 billion in 2014 as against N6.02 billion in 2013. After taxes, net profit rose from N5.07 billion to N7.06 billion.
The bank’s pre-tax profit margin rose from 9.24 percent in third quarter 2013 to 11.6 percent in September 2014, underlying the improving profitability of the bank.
In his remarks, managing director, Yemi Adeola, said the performance of the bank was driven by increasing brand acceptability as shown in its growing revenues and reduction in impairment charges.
According to him, as part of the initiatives to support its retail banking proposition, the bank has re- aligned its business by market segments for a more focused market reach while it has continued to increase its transaction channels and it is on track to deliver additional 21 branches and 500 Automated Teller Machines (ATMs) by the end of the year.
“Following our Extra-ordinary General Meeting billed for November 11, we plan to conclude the ongoing private placement before the end of the year. This will put us in a strong competitive position to achieve our growth plans in coming quarters. In the meantime, we remain focused on efficiency and are optimistic that the full year returns will be in line with our earlier Management guidance,” Adeola said.
He noted that the 41 percent growth in profit before tax despite pressures on earnings arising from monetary policy changes was driven by improvements in revenues and a 30 percent reduction in impairment charges.
According to him, interest income increased by 15 percent, while interest expense declined by three per cent resulting in a 32 percent growth in net interest income. The bank recorded a 20 per cent growth in total assets to N847 billion and a 19 percent growth in deposits to N679 billion with a 100 basis points reduction in cost of funds to 4.9 percent.