By Chinwendu Obienyi
Sterling Bank Plc has announced that its first quarter profit (Q1) of 2021 grew by 25.98 per cent from N2.07 billion in Q1 2020 to N2.395 billion.
This was as its gross earnings contracted to N31.0 billion primarily due to an 11.0 per cent dip in interest income as against N32.9 billion recorded in Q1 2020. This loss was however moderated by a 27 per cent growth in non-interest revenue.
The bank further said it recorded 15.6 per cent decline in interest expense and this delivered an 80 basis points (bps) drop in cost of funds as yield on earning assets declined by 210 bps. Notwithstanding the development, bank’s customer deposits grew by 9.3 per cent, while it maintained a healthy deposit mix of 70.5 per cent in low-cost funding with its NPL ratio remaining stable at 1.9 per cent.
Commenting on the results, the Chief Executive Officer, Sterling Bank, Abubakar Suleiman, said that during Q1 2021, the campaign to vaccinate the global population against COVID-19 gained ground, bolstering consumer and investor confidence.
He noted that at the macro level, treasury yields, and oil prices retraced towards their historical averages, contributing to reserves accretion and easing the pressure in the foreign exchange markets. “Riding on the improved operating environment, the bank recorded a year-on-year double digit growth in profit after tax in the first quarter, aided by a 9.3 per cent rise in customer deposits and 15.6 per cent decline in funding cost.
In furtherance of our transformation agenda, we formally launched our digital commodity market place, SABEX. This is a product of three years of experimentation and extensive consultation with all key stakeholders and an important component of our strategy to use technology to improve productivity for players across the HEART sectors. Overall, we closed with a profit after tax of N2.40 billion in the first quarter of the year, a 16 per cent improvement on the corresponding period in 2020”, Suleiman said.