Abubakar Suleiman, Sterling Bank’s CEO has explained the reason behind a 6% decline in the bank’s profit for the half year period ended June 30, 2019.
He also disclosed why gross earnings which declined by about N3billion were negatively impacted.
According to him, “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 and consumer and digital and transactional banking businesses.”
A total of N74.5 billion was declared as the gross earnings in the first half of 2019, while N77.6 billion was reported for the same period of 2018.
The profit after tax reported in the results stood at N5.7 billion in the first six months of 2019 compared with the N6.2 billion made in the first six months of 2018, representing to a 6% decline.
However, the bank reported a net interest income growth of 19% N30.4 billion was recorded for the half year ended June 30, 2019 as against N25.5 billion for the corresponding period of 2018.
Other financial highlights showed that customer deposits grew to N818.6 billion during the period under review compared to N760.6 billion in 2018, indicating a growth of 7.6%.
Total assets grew by 4.8% to N1.156 billion against N1.102 billion in 2018, while net operating income also rose by 4.2% to N40.4 billion compared with N38.8% in 2018.
Reflecting on the financial performance highlights, Suleiman disclosed that the bank managed to achieve a 14% decline in interest expense in line with the Banks strategic objectives, resulting in a 170 basis points drop in cost of funds and, consequently, a 131 basis points increase in net interest margin.
The bank achieved 14.5% growth in low cost funds, delivering a 7.6% growth in customer deposits while net operating income grew by 4.3%
Personnel costs rose by 14% in line with the bank’s commitment to intensify strategy execution, as operating expense grew by 6.1% while 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.