Sterling Bank Plc has unveiled strategic plan to deepen its market penetration and expand its retail foot print in the remaining part of the year.
The bank revealed that it will commence massive roll out of conventional and alternative channels in order to increase it products reach, as well as rolling out of agency banking model to drive financial inclusion.
The Managing Director/CEO, Mr. Yemi Adeola, said efforts would be geared at upgrading the physical infrastructure of the bank to reflect the retail look and feel, while private banking business targeted at the high net worth individuals will be commenced during the period.
According to him, Sterling Bank will deploy a new core banking application to fully enhance service delivery to the bank’s customers. Already, he said the bank has one million active customer base with 168 branches, 300 ATMs and 5,000 Point of Sales (PoS) machines spread across its branches nationwide.
He explained that the bank is in a strong growth phase and controls three percent market share by assets, adding that it has been delivering shareholders’ value having consistently paid dividend since 2011. To improve staff productivity, Adeola said the bank will concentrate on strengthening its performance management system for sales and back-office workforce.
On the bank’s financial performance, he explained that its loan book grew by five percent to N344.785 billion in the first quarter ended March 31, 2014 driven by growth in lending to the corporate and commercial segments of the economy.
Corporate lending, according to him, accounted for 68.2 percent of total loans, while retail and commercial lending accounted for 12.6 percent and 13.1 percent respectively.
Decline in institutional loans, which accounted for meager 6.1 percent as against 8.6 percent was due to pay-down of existing facilities,” he said.
Sector-by-sector breakdown of the loan structure showed significant exposure in oil and gas industry, which accounted for N111.119 billion of the bank’s total loan and advances for the period, 11.4 percent growth over N99.733 billion accruing to the sector in the same period in 2013.
This was followed by real estate and construction, which accounted for N79.550 billion of the bank’s total loan within the period.
“Gross earnings rose by 24 percent to N24.6 billion in Q1 2014, from N19.8 billion in Q1 2013, driven by interest income, which rose by 31 percent and accounted for 76 percent on the back of increase in lending activities.
“Net interest margin improved by 240 basis points from 5.2 per cent in first quarter of 2013 to 7.6 per cent driven mainly by increase yield on earning assets”. Despite a high interest rate environment, funding costs moderated by 30 basis points to 5.6 percent,” he said.
He further explained that deposits declined marginally by five percent year-to-date to N540.0 billion reflecting management’s focus on balance sheet efficiency, saying that retail deposits accounted for 66 percent of deposits, while wholesale funds accounted for 34 percent. Capital adequacy and liquidity ratios were above the regulatory benchmarks of 10 percent and 30 percent respectively and the bank achieved double digit growth in earning on quarter-to-quarter basis, he stated.
