In spite of the adverse effects of the COVID-19 pandemic Sterling Bank Plc, a full service national commercial bank has recorded N12.4bn profit before tax in the financial year ended 31 December 2020.
The Lender disclosed this in a statement titled ‘Sterling Bank reports 16 per cent profit growth in 2020’ on Monday.
Sterling bank reported the Profit Before Tax on gross earnings of N138.9 billion in the financial year ended 31 December 2020 compared to a PBT of N10.7 billion on gross earnings of N150.2 billion in the same period of 2019, representing a 15.9percent growth.
In response to the pandemic and expected credit losses, Sterling Bank said it increased the cost of risk by 10bps to one per cent while moderating the non-performing loan ratio downwards by 30bps to 1.9 per cent.
Commenting on the results, the Chief Executive Officer, Sterling Bank, Abubakar Suleiman, said 2020 was an extraordinary defined by the COVID-19 pandemic.
He said, “COVID-19 disrupted society and severely impacted economic activities. During the year, we channelled our resources towards empowering our stakeholders to respond to the unprecedented disruption while supporting them to adapt to new banking methods through novel platforms like OneBank and Pay with Specta.”
Reflecting market dynamics influenced by the pandemic, Sterling Bank’s NIBSS instant payments and transaction volume grew by 89.4 per cent compared to the previous year on the back of investments in digital platforms, it stated.
As a result, the bank said it achieved a six per cent growth in profit after taxes to reach N11.2bn, a development that underpinned a 13.5 per cent growth in shareholders’ funds in a pandemic year.
According to Suleiman, the bank’s gross earnings moderated by a 12.4 per cent decline in interest income as yields trended low.
Interest expense declined by 21.3 per cent, resulting in a 160 bps drop in the cost of funds; this was driven by a 39.5 per cent year-on-year growth in low-cost customer deposits.
The bank also ensured that the cost-to-income ratio declined year-on-year to 77.4 per cent as it recorded a 2.5 per cent drop in operating expenses despite rising inflationary pressures.
Sterling Bank said it spearheaded efforts to contain the pandemic by encouraging innovation to increase COVID-19 testing capacity.
It added that it supported healthcare workers on the frontline.