Sterling Bank Nigeria H1 profit up 97 per cent - CNBC Africa

Sterling Bank Nigeria H1 profit up 97 per cent

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“The numbers we showed in the first quarter are sustainable and that is because they are being driven by significant growth in customer base and the retail deposit that comes with that. On the assets side there has been significant growth. We have close to 60 per cent of loan book now in the corporate banking sector,” Sterling Bank chief financial officer Abubakar Suleiman told CNBC Africa on Friday.

“We intend to grow loans this year by just over 30 per cent and we’ve already achieved 19 per cent of that. Our target for deposit growth for the year was 36 per cent and currently we’ve done well over half of that.”

Profits of the mid-tier lender were lifted by a 70 per cent increase in non-interest income. The results were also underpinned by a 21 per cent jump in deposits.

This year’s second quarter earnings per share doubled to 38 kobo from 19 kobo in the same period in 2012. 

The bank has added close to 200,000 active accounts in six months and now has a share price that is up 44 per cent year to date.

Sterling Bank currently has a programme that will enable it to raise 400 million dollars.

Roughly 12.5 billion naira will be raised through a rights issue, which will be the first phase of the programme. The capital raised will be deployed to strengthen the bank’s balance sheet.

A private placement for 120 million dollars will be followed thereafter. The programme will then be closed with another 200 million dollars in tier two capital.

“At the end of the day for us the most difficult thing to build is customer base. You can build branches and you can scale up on the assets side but if you haven’t got enough customers doing business with you, that’s where the challenge is,” said Suleiman.

“We’re looking to acquire customers that we can upgrade to the sort of service that we’re used to offering and that is how we get value.”

 

 

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