Sterling Bank’s 2016 audited result consolidates stress position
…As PAT declines 50%
A cross section of shareholders of Sterling Bank Plc may have started reconsidering their investment in the deposit money bank with the release of the bank’s 2016 audited financial statement which reflected consolidation of stress position.
The bank’s result for the period ended 31 December 2017 released by the Nigerian Stock Exchange (NSE) Thursday showed loss and depression in the lender’s key performance measuring indices such as profit after tax (PAT), profit before tax (PBT), other operating income, net trading income, posted massive decline, even as interest income grew by 22. 49 Per cent.
The result gave an insight into the bank’s capital adequacy ratio (CAR), provisioning and debt to equity ratio, as conflicting with regulatory threshold, even as gross earnings grew by 1.13 per cent to N111.44 billion in 2016, from N110.19 billon posted in 2015, while interest income,also, rose by 22.49 per cent, to N99.10 billion, from N80.91 billion in 2015.
The result revealed that the bank’s net trading income declined by 97.79 per cent to N234.94 million from N10.65 billion in 2015, Other Operating income closed lower at N1.3 billion, from N3.1 billion in the corresponding year, reflecting decline by 57.82 per cent, while Impairment charges grew by 43.71 per cent, to N11.7 billion, from N8.2 billion in 2015. Impairment charges is writing off worthless goodwill.
Sterling’s bank’s profit and lost lines of the result showed that PBT depreciated to N6 billion, from N11.02 billion in 2015, showing -45.54 per cent drop, Profit After Tax declined by 50 per cent to N5.16 billion, from N10.3 billion posted in 2015 financial year, while fees and commission income in 2016 dropped by 30.50 per cent to N10.79 per cent from N15.52 billion in the corresponding year.
The bank’s fair value loss on available for sale investment closed the period at -1081.59 per cent to N11.32 billion, from N1.15 billion loss in 2015. Loss on available for sale securities recorded by the bank in 2016 financial year recorded remarkable drop, while other Comprehensive loss for the period accounted for 645.98 per cent, from N2.29 billion in 2015, to N12.48 billion in 2016 financial year.
Total comprehensive income for the period recorded 158.15 per cent declined to N7.31 billion, from N12.58 billion in 2015.
Market observers expressed concern that the result will trigger unfavorable reactions from shareholders, even as core market analysts have expressed intention to review downwards, the bank’s forecast for the year.
