Sterling Bank Plc has laid a solid foundation for growth in the years ahead in spite of the mitigating effect of the Coronavirus pandemic and other external shocks. Chief Executive Officer, Sterling Bank Plc, Mr. Suleiman Abubakar, in a review on the outlook of the bank, assured shareholders and other stakeholders that the future of the bank remains reassuring.
According to him, the bank has laid a sound foundation for 2020 with significant investments in technology to accelerate its digitisation while the bank will further distinguish itself by serving customers with empathy and knowledge on their own terms. Suleiman noted that for a bank to succeed in these uncertain times, it must be agile, cautious, innovative, knowledgeable and prepared.
He added that the bank’s unwavering commitment to a more disciplined deployment of scarce capital and the strength of its retail business contributed to a 15 per cent growth in profit after tax to N10.6 billion in 2019.
Suleiman spoke at the 58th Annual General Meeting (AGM) of the bank held virtually by proxy and streamed live from the MUSON Centre in Lagos. Addressing shareholders at the meeting, Chairman, Sterling Bank Plc, Mr. Asue Ighodalo said the bank’s shareholders’ fund grew by 22.2 per cent to N119.6 billion because of increase in retained earnings despite the challenging operating environment under which it operated during the financial year ended December 31, 2019.
He said the recorded growth in total equity was attributable to growth in comprehensive income arising from gains recorded from investments in debt securities. He added that the board of directors recognised the importance of dividends to its shareholders and constantly sought to balance this with capital requirements to support the bank’s next wave of growth.
“Accordingly, the board recommends the payment of three kobo per share as dividend for the year ended December 31, 2019 to reward our loyal and committed shareholders. This affords the bank the required buffer to finance its growth ambitions, and effectively become a first-class, stronger, creative and extremely dependable financial institution,” Ighodalo said.
According to him, a direct contribution of the bank’s investments in technology and intelligent automation can be seen in the performance of) SPECTA- Nigeria’s fastest digital retail lending platform.”
He said SPECTA remained the major source of incremental lending, contributing to the growth of the bank’s core business and offering over N45 billion in loans to individuals and small business owners in 2019 alone.This represented over 200 per cent growth in loans given to the bank’s retail and consumer segment compared to 2018.
He explained that the bank consolidated its efforts in the mobilisation of deposits during the review period, thereby recording a 17.4 per cent growth in deposit base to N893 billion from N761 billion. He noted that the bank achieved) a) higher) growth) of) 19.4 per cent in) the) mobilisation) of) low-cost current and savings accounts deposits, maintaining a 60 per cent deposit mix during the year, a development that contributed largely to improved cost of funds from 7.4 per cent in 2018 to 6.3 per cent.
He pointed out that although the bank’s earnings grew only marginally by one per cent to N150.2 billion, it was able to deliver 12.5 per cent growth) in profit) before) tax and 15 per cent) growth) in) profit) after-tax at N10.6 billion; despite 12 per cent increase in operating) expenses. He attributed the growth in operating expenses to increased investments in human capital and technology, reflective of the bank’s transformation journey and desire to further motivate and upskill employees of the bank.
Meanwhile, shareholders have commended Sterling Bank Plc for sustaining steady performance in spite of the challenges in the operating environment. They commended the overall performance of the bank and the board’s decision on dividend payment. President, Noble Shareholders Association, Mr. Mathew Akinlade, commended the bank for bringing down its non-performing loans (NPL) ratio from 8.7 per cent in 2018 to 2.2 per cent in 2019, a development which he described as below the benchmark of five per cent prescribed by the Central Bank of Nigeria.
He lauded the bank for compliance which reduced penalties for contraventions in 2019 by 73.3 per cent compared to 2018. Founder, Independent Shareholders Association of Nigeria (ISAN), Sir Sunny Nwosu appreciated the increase in the bank’s demand deposit which went up by 47 per cent and described it as “quite good.”
As a shareholder who is also a customer of the bank, Nwosu was full of appreciation for the way employees of the bank attend to customers and expressed the hope that this excellent service delivery would continue to differentiate Sterling Bank post-COVID-19. A shareholders’ activist, Mr. Nonah Awoh commended the bank for its level of financial disclosure.
“I don’t think it is out of place to have payments of external assessors stated. I want other companies to learn from Sterling Bank and do the same,” Awoh said. President, Progressive Shareholders Association of Nigeria, Mr. Boniface Okezie, noted that the bank has done a lot to grow assets to N1.182 trillion while loans and advances have also grown.
“We commend the board for retaining earnings, protecting shareholders’ funds, and ensuring there is no insider abuse as it relates to loans. We are happy that our bank is at the forefront of the fight against COVID-19 and keeping the environment clean through its support for LAWMA,” Okezie said. National Coordinator, Shareholders United Front (SUF), Mr. Gbenga Idowu, commended the bank’s strategic focus on the critical sectors of health, education, agriculture, renewable energy and transportation, under its HEART strategic initiative.
He noted that these sectors are critical sectors to national growth and development, especially in the wake of COVID-19 pandemic. He urged the bank to remain committed to these critical sectors, most especially agriculture, which he described as the future of the country.