Sterling Bank Plc has posted a profit before tax of N2.8 billion for the first quarter ended March 31, 2016.
The News Agency of Nigeria (NAN) reports that this is contained in the bank’s unaudited result released to the Nigerian Stock Exchange (NSE) on Thursday.
The profit before tax was in contrast with N4.0 billion achieved in the corresponding period in 2015.
The bank’s profit after tax dropped to N2.5 billion compared with N3.9 billion posted in the comparative period of 2015, a decrease of 35 per cent.
The report indicated that net interest margin, which measures the profitability of a bank’s lending operations, rose to eight per cent during the period against 7.4 per cent recorded in the corresponding period in 2015.
Its cost of funds stood at 5.3 per cent compared with 5.9 per cent achieved in the preceding period of 2015 due to cost efficiency strategy introduced.
Also, the bank’s net interest income appreciated by 24.7 per cent to N11.4 billion in 2016 in contrast with N9.2 billion in the same period in 2015.
The bank reportedthat it was driven by a 14.4 per cent decrease in interest expense resulting in a 940 basis points improvement in net interest margin to 56.9 per cent.
Speaking on the bank’s outlook, Mr Yemi Adeola, the bank’s Managing Director, said that the bank adopted a cautious, but progressive approach to business due to the challenging macro-economic conditions.
Adeola said that subdued crude oil prices, persistent fuel and power supply disruptions and significant foreign exchange shortages increased the cost of doing business and heightening the pressure on household income.
According to him, the resultant monetary tightening measures could further challenge the operating environment.
He also said that the management of the bank prioritised balance sheet efficiency, cost efficiency and prudent credit risk management to ensure that non-performing loan remained flat below the regulatory threshold of five per cent.
“We are confident that our goals for 2016 will be met despite the subdued outlook for the Nigerian economy.
“Our optimism comes from the various investments focused on operating efficiency that the bank had made over the past year, which are now starting to pay off.
“Our plan for the year is to prioritise operating efficiency, ensure moderate loan growth, while continuing to diversify funding sources as our retail banking strategy matures,” Adeola said. (NAN)