We’re reinvesting earnings to drive future growth, says Sterling Bank

The Board of Sterling Bank Plc has explained that its decision to adopt a modest sustainable dividend policy was in line with the bank’s long-term commitment to creating sustainable shareholders’ value and grow its business continuously in spite of macroeconomic challenges.

Addressing shareholders at the bank’s Annual General Meeting (AGM) in Lagos, Chairman, Sterling Bank Plc, Mr Asue Ighodalo, said the bank places priority on the interest of shareholders while maintaining adequate capital buffers to support the sustainable growth of the business.

Shareholders approved the payment of a dividend of five kobo per share for the 2020 business year amidst commendations for the board and management of the bank.

Ighodalo said the dividend payment reflected the bank’s focus on long-term and sustainable value creation for its shareholders and other stakeholders.

He assured the shareholders that the board and management of the bank are committed to delivering value to them as they continue to drive the growth and profitability of the business towards creating a world-class financial institution of choice.

He noted that in spite of the challenges caused by COVID-19 pandemic in 2020, the bank remained focused on continued strategic development of its core pillars of digitisation, agility and specialisation.

He said the bank has engaged with existing and potential customers and responded to market trends and developments, maintaining its long-standing commitment to innovation.

“Sterling Bank sustained an improvement in business performance during the year under review despite the harsh economic environment triggered by the Covid-19 pandemic. Although earnings declined by 7.5 per cent to N138.9 billion, we delivered a 15.9 per cent growth in profit before tax and a 6.0 per cent growth in profit after tax to N12.4 billion and N11.2 billion,” Ighodalo said.

He noted that in line with the commitment to drive operational efficiency across the organisation, the bank achieved a 2.5 per cent reduction in operating expenses as it continues to leverage on past investments made in technology.

He said the bank closed the year with an improved balance sheet position as total assets grew steadily by 9.8 per cent to N1.3 trillion in 2020. This was driven by consolidated efforts in mobilising customer deposits, leading to a record 6.5 per cent growth in deposit base to reach N950.8 billion from N892.7 billion in 2019.

Ighodalo said the bank achieved a 39.5 per cent growth in low-cost current and savings accounts deposits resulting in an improved deposit mix of 78.9 per cent in CASA/total deposit during the year under review. He said this contributed largely to the improved cost of funds from 6.3 per cent in 2019 to 4.7 per cent in 2020 below the five per cent threshold. The bank also grew shareholders funds by 13.5 per cent to N135.8 billion on the back of a rise in retained earnings.

Shareholders who spoke at the meeting commended the board and management for the resilience, improved financial performance and returns on investment in 2020 despite the adverse impact of the Covid-19 pandemic on the global and local economic environment.

President, Association for the Advancement of Rights of Nigerian Shareholders (AARNS),  Dr Faruk Umar described the bank’s performance as excellent and commended it for its accounts’ quality.

A shareholders’ leader and Managing Director, Lancelot Ventures Limited, Mr Adebayo Adeleke, commended the bank for implementing a deliberate market-focused strategy.

President, Nigeria Solidarity Shareholders Association (NSSA), Mr Matthew Akinlade, noted that the bank has consistently been improving its earnings per share in the last five years.

National Coordinator, Pragmatic Shareholders Association of Nigeria, Mrs Bisi Bakare, applauded the bank for significant growth in total assets and deposit base while noting improved retained earnings, increased profit before tax and reductions in operating costs and non-performing loans achieved during the year.

National Chairman, Progressive Shareholders Association, Mr Boniface Okezie, noted the bank’s consistent dividend payout while urging it to continue to pursue its repositioning strategies aggressively to ensure it competes favourably in the industry.

 

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