Sterling Bank earns N9.1b in Q1, declares N1.4b profit

STERLING Bank Plc has posted gross earnings of N9.1 billion for the unaudited first quarter results ended 31 March, 2011, indicating a growth of 9 per cent over the N8.3 billion in the comparable period of the previous year.Profit before tax  provisions also grew 219 per cent to N1.7 billion, while Profit before Tax remained stable at N1.4 billion.Net Loans & Advances (including Advances under Finance Lease) advanced 6 per cent to N109.6 billion from N103.8 billion, total assets rose marginally by 1percent to N280.8 billion from N277.1 billion.Deposits, however, reduced slightly by 1 per cent to N201.7 billion from N203.1 billion, operating income rose 35 per cent to N5.9 billion from N4.4 billion, while operating expenses increased 9 per cent to N4.1 billion from N3.8 billion.In line with Sterling Banks strategy of costs reductions, funding costs declined 19 per cent to N3.2 billion from N3.9 billion in the comparable period of 2010 feeding through a 13 per cent improvement in net interest margins.Cost-to-Income ratio (including allowances for risk assets) was 75 per cent as against 73 per cent in first quarter of 2010, net interest margin rose to 49 per cent compared with 41 per cent in Q1 2010, while annualised Return on Average Equity was18 per cent as against 24 per cent.Besides, Net Loan-to-deposit was 54 per cent compared with 51per cent in December 2010, while liquidity ratio stood at 46 per cent as against 47 per cent.Speaking on the banks results, Yemi Adeola, group managing director said, we started 2011 on a positive note having achieved 9 per cent growth in gross earnings driven by strong growth in non-interest income. Despite the high interest rate regime following the review of the Monetary Policy Rate (MPR) by 100 basis points to 7.5 per cent, we achieved 19 per cent reduction in funding costs resulting in improved margins.During the period under review, management focused on balance sheet efficiency and re-allocation of resources to more profitable activities having achieved 6 per cent growth in net loans and advances (including advances under finance lease).We have embarked on key initiatives to drive stable low cost deposit mobilisation in order to improve deposit mix and further enhance margins. We are optimistic that earnings will grow rapidly in the remaining quarters of the year. 
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