Nigeria: Sterling Holdings Sees 52.3% Increase in Post-Tax Profit

Sterling Financial Holdings has reported a substantial 52.3% rise in its profit after tax, reaching ₦16.26 billion for the first half of the year, compared to ₦10.68 billion during the same period last year. This impressive growth is attributed to a rise in net interest income and effective cost management strategies.

The increase was detailed in the company’s condensed unaudited interim financial statements for June 2024. Interest income surged to ₦120.88 billion, up 57.5% from ₦76.73 billion, driven by improved yields on loans and advances and increased investments in high-yield securities.

Interest expenses more than doubled, rising 100.3% to ₦63.29 billion from ₦31.61 billion. However, net interest income still grew by 27.6%, reaching ₦57.59 billion compared to ₦45.13 billion in H1 2023, reflecting the company’s ability to outpace the rise in interest expenses with higher interest income.

Net fees and commission income increased by 31.1% to ₦15.22 billion from ₦11.61 billion, buoyed by higher transaction volumes and improved digital banking services. Net trading income also saw a significant boost of 57.5%, reaching ₦12.38 billion compared to ₦7.86 billion in H1 2023, due to gains in foreign exchange trading and increased capital market activity.

Operating income grew by 31.8%, totaling ₦88.91 billion for H1 2024, up from ₦67.46 billion. Personnel expenses rose by 39.6% to ₦13.65 billion from ₦9.77 billion, reflecting staff expansion and salary adjustments. Other operating expenses increased by 28.8% to ₦19.29 billion from ₦14.98 billion, while credit loss expenses remained relatively stable, rising slightly by 7.3% to ₦4.47 billion.

Income tax expenses also increased by 39.3% to ₦1.08 billion, and earnings per share grew by 51.4% to 56 kobo from 37 kobo.

The company’s total assets rose by 22.1% to ₦2.64 trillion from ₦2.16 trillion in H1 2023, driven by increased lending activities and higher investment securities. Total liabilities increased by 18.5% to ₦2.31 trillion from ₦1.95 trillion, while total equity grew by 42.7% to ₦330.27 billion.

In 2023, Sterling Financial Holdings reported a 12% increase in profit after tax to ₦21.58 billion, up from ₦19.30 billion the previous year. Profit before tax also improved by 9.35% to ₦22.69 billion.