Sterling Bank Plc grew headline earnings by 12 per cent to N28.6 billion in the first quarter of 2017 as the bank’s net interest margin improved to 8.2 per cent within the first three months.
The first-quarter report released at the weekend showed continuing improvement in the underlying core banking business of the bank as management continued to optimise cost management.
The interim report for the first quarter ended March 31, 2017, released at the Nigerian Stock Exchange (NSE), showed that gross earnings braced the economic recessionary trend to close March 2017 at N28.55 billion compared with N25.50 billion recorded in the comparable period of last year.
The top-line earnings performance was driven by 26.3 per cent increase in interest income and improved cost management, leaving net interest income higher by 18.3 per cent at N13.5 billion in first quarter 2017 as against N11.4 billion in first quarter 2016. Net interest margin, which measures the underlining profitability off the core banking business, thus improved marginally from 8.1 per cent in first quarter 2016 to 8.2 per cent in first quarter 2017.
The bank was able to reduce operating expenses through strategic cost control measures taken in response to inflationary pressures. Operating expenses declined from N12.6 billion in first quarter 2016 to N12.2 billion in first quarter 2017. However, impairment charges impacted on the bottom-line. Operating income stood at N14.2 billion while pre and post tax profits stood at N2.03 billion and N1.88 billion respectively in first quarter 2017. In the comparable quarter of 2016, operating profit stood at N15.4 billion while pre and post tax profits were N2.81 billion and N2.54 billion.
The balance sheet of the bank remained strong as total assets rose by 6.8 per cent to N891.3 billion by March 2017 compared with N834.2 billion recorded at the beginning of this business year. Shareholders’ funds also rode on the back off organic accretion of profit to close March 2017 at N87.5 billion.
Managing Director, Sterling Bank, Mr. Yemi Adeola, said the first quarter 2017 performance was in line with expectations, as earnings remained resilient with a double-digit growth despite the macroeconomic headwinds that persisted during the period.
He noted that the bank made significant progress in its efficiency drive through the adoption of strategic cost management initiatives, which resulted in 3.3 per cent reduction in operating expenses and a 190 basis point improvement in cost-to-income ratio.
He pointed out that net interest margin also improved marginally to 8.2 per cent despite the crowding out effect of sovereign borrowing which kept interest rates high.
He added that the bank had retained its cautious stance on lending while continuing to strengthen its risk management framework across people, processes and information technology systems.
“Going into the year, we will continue to explore innovative ways to improve revenue, while simultaneously enhancing the overall efficiency of our business operations,” Adeola said.
The post Sterling Bank’s gross earnings rises by 12% to N28.6b in Q1 appeared first on The Nation Nigeria.
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