Sterling Bank targets 25% loan growth

Sterling Bank Plc says it will grow its loan book by 25 per cent during the 2014 financial year.

The bank is also looking at cost-to-income ratio of 68 per cent; deposit growth of 29 per cent; and a double-digit growth in earnings of 20 per cent, according to its analyst/investor presentation for the first quarter of 2014.

The presentation was made by the bank’s Chief Financial Officer, Mr. Abubakar Suleiman, to journalists in Lagos.

The bank said it was already in a strong growth phase of three per cent market share by assets; a stronger capital base of N71bn; and a growing customer base consisting of over one million active customers.

As a result, the bank said its key strategic initiatives for the financial year included completion of its capital raising exercise and the upgrade of its physical infrastructure to reflect the retail look.

During the year, the lender indicated that it planned to roll out conventional and alternative channels to deepen market penetration of its products; and also commence private banking business targeted at high net worth individuals.

The presentation showed other plans it had for the year would include a “rollout of our agency banking model to drive financial inclusion; the launch of one-education initiative targeted at the education sector value chain.”

Others are the deployment of a new core banking application to fully enhance service delivery to our customers; and strengthening of performance management system for sales and back-office workforce to improve staff productivity.

Suleiman recalled that the lender’s gross earnings rose by 24 per cent to N24.6bn in the first quarter of 2014 from N19.8bn in the same period of last year.

He said the earnings were driven by interest income, which rose by 31 per cent and accounted for 76 per cent on the back of an increase in lending activities.

According to the CFO, operating income rose by 34 per cent to N16.2bn from N12bn in the first quarter of 2013 due to a 58 per cent increase in net interest income.

He also said, “Growth in net interest income was boosted by a 31 per cent growth in interest income relative to a modest increase of eight per cent in interest expense. Increase in operating expenses was driven by ongoing investments in branch refits and expansion in addition to an increase in Asset Management Corporation of Nigeria surcharge.

“Cost to income, excluding impairment charge, declined by 40 basis points to 71.7 per cent (76.7 per cent unadjusted) from 72.1 per cent in first quarter of 2013, reflecting improvements in operating efficiency.”