Sterling Bank Plc, a full service national commercial bank, has reported a trading income of N7.1 billion for the third quarter ended September 30, 2020, compared with N1.9 billion for the corresponding period of 2019, representing an increase of 264.7 per cent.
In his remarks on the impressive performance, Mr Abubakar Suleiman, Managing Director and Chief Executive Officer (MD/CEO) of the bank said, “With economic activity picking up in the third quarter, following the gradual ease in the nationwide lockdown, we continued to leverage on our existing remote work policy to enhance workforce productivity while ensuring uninterrupted service delivery to both existing and new customers.
Our performance continues to reflect positive results of strategic decisions and investments in our focus areas as we continued to record significant improvement in both funding and operational costs. Overall, we delivered a 7.2 per cent increase in operating income and a profit after tax of N7.37 billion despite prevailing uncertainties around the COVID-19 pandemic and recent fiscal reforms.”
The CEO said a 26.2 per cent dip in fee income occasioned by the downward review of electronic banking fees, and slower loan origination due to the protracted lockdown was moderated by a 264.7 per cent spike in trading income.
He said growth in the balance sheet was driven by a 26.5 per cent growth in low-cost funds, which saw the bank’s CASA mix improve to 71 per cent from 60 per cent, delivering a 6.6 per cent growth in customer deposits. Our cash and short-term balances increased in line with the higher regulatory reserves while interest income also declined by 6.7 per cent, which was offset by a 17.0 per cent decline in interest expense. This delivered a 120 bps drop in the cost of funds and, consequently, a 100-bps increase in net interest margin.
Suleiman noted that in terms of asset quality, “We proactively increased our cost of risk by 100 bps to 1.9 per cent, while recording a marginal increase in NPL ratio to 2.9per cent, well below our target of five per cent ”
He explained that the decline in OPEX was achieved by moderating administrative expenses despite growth in other operating expenses, including AMCON and insurance fees.
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The CEO said the bank was able to maintain a strong capital and liquidity position of 16.1 per cent and 32.5 per cent respectively above the regulatory benchmark, adding that overall the bank delivered a profit after tax of N7.37 billion for the 9-month period.