Sterling Bank To Raise N35billion Fresh Capital in H2

Sterling Bank Plc is wrapping up plans to raise N35 billion tier 2 capital in the second half of 2016, as improved assets quality and lower cost of fund stabilised the performance of the lender in the first half of 2016.

According to interim report and accounts of Sterling Bank Plc for the six-month period ended June 30, 2016, which was released over the weekend at the Nigerian Stock Exchange, NSE, the bank continued to benefit from its credit risk management and efficient cost management.

The benefit from its credit risk management was made possible even as the proportion of non-performing loans dropped further to 2.8 per cent by June 2016 as against 4.8 per cent recorded in comparable period of 2015.

The report also showed that the bank’s cost of funds declined to 4.7 per cent as against 5.9 per cent, underlining the increasing success of the bank’s retail banking strategy and the preference by depositors for its brand.

Managing Director, Sterling Bank Plc, Yemi Adeola, said the bank would in the second half of the year continue to prioritise operating efficiency and ensure moderate loan growth; while continuing to diversify funding sources as our retail banking strategy gains traction.

He added that the bank also remained committed to its plan to conclude its N35 billion tier 2 capital raising.

Key extracts showed that net interest income increased by 31.9 per cent to N25.6 billion in first half 2016 as against N19.4 billion in corresponding period of 2015.

This was driven by a 22 per cent decrease in interest expense resulting in a 1240 basis point improvement in net interest margin to 61.7 per cent.

Non-interest income, however, reduced from N15.2 billion in first half 2015 to N8.5 billion in first half 2016. Altogether, gross earnings stood at N50.06 billion in first half 2016 as against N55.04 billion in comparable period of 2015.

Meanwhile, net operating income increased marginally from N30.2 billion to N30.5 billion. Profits before and after tax stood at N4.4 billion and N4 billion respectively.

The balance sheet of the bank continued to improve. Net loans and advances increased by 36.5 per cent to N462.3 billion largely driven by foreign exchange revaluation.

Also, customer deposits increased to N627.9 billion from N590.9 billion. Total assets excluding contingent liabilities increased by 20 per cent N959.2 billion by June 2016 as against N799.5 billion recorded by December 2015.