Sterling Financial Holdings Company Limited · NSENG:STERLINGNG
Sterling Financial — Q3 2023 Earnings Presentation
28 slides from Sterling Financial's earnings presentation, Dec 1, 2023
Slide 1: Investors & Analysts Presentation Q3 2023
Investors & Analysts Presentation Q3 2023 PUBLIC
Slide 2: Disclaimer
Disclaimer • This presentation has been prepared by Sterling Financial Holdings Company Plc (hereafter referred to as “Sterling Holdco”, “the Holdco”, “We”). It is intended for an audience of professional and institutional investors who are aware of the risks of investing in the shares of publicly t
Slide 3: Disclaimer
Disclaimer • Accordingly, there are or may be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. Sterling Holdco believes these factors include but are not limited to those described in its Unaudited Report for September 30, 2
Slide 4: Strategic Objectives
Strategic Objectives In line with our business model, we continue to leverage on industry knowledge, advanced technology & ethical financing to empower our stakeholders Strengthened Strategic Workforce Differentiated Balance Sheet Partnerships Empowerment Digital Platforms Maintained a resilient For
Slide 5: Strategic Objectives
Strategic Objectives In line with our business model, we continue to leverage on industry knowledge, advanced technology & ethical financing to empower our stakeholders Business Stability Market share gains Predictable and Sustainable Earnings through Digital Capabilities Return value to shareholder
Slide 6: Content
Content 01 Our Digital Offerings 03 Appendix 02 Operating Performance (Q3 2023) PUBLIC
Slide 7: Our Digital Offering
Our Digital Offering Digital Ecosystem Specta is an online retail lending solution targeted at providing loans Lending of up to N5 million in 5 minutes. OneBank is a one-stop-shop for all banking Products needs. It is our mobile app that eliminates Pay with Specta brings merchants and the need to vi
Slide 8: Our Digital Offering
Our Digital Offering Digital Ecosystem Switch is a digital bank built for Nigerians at home and abroad, allowing all users to access financial Specialized services. Impact Products Products TBH is our remodelled business banking solution/platform built to cater to all SME-related needs and wants. Tr
Slide 9: Health Insured
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Slide 10: Operating Performance Q3 2023
Operating Performance Q3 2023 PUBLIC
Slide 11: Channel Highlights
Channel Highlights Channels POS ATM USSD Users Branches Customers Professional Staff 11,682 594 3.9M 140 3.9M 3,424
Slide 12: Financial Highlights
Financial Highlights In the third quarter of the year, we strengthened our financial position through effective funding optimization and our drive for efficiency Financials (N’ millions) Key Ratios Total Assets Loans & Advances Customer Deposits CASA Deposits NPL Cost of Risk 2,247,965 20.99% 819,76
Slide 13: Credit Ratings
Credit Ratings Ratings Ratings Caa1 & B3 BBB & A3 BBB+ & A2 PUBLIC
Slide 14: Performance Snapshot (1/2)
Performance Snapshot (1/2) The Group achieved a profit after tax of N16.48 billion in the third quarter of the year, a 23.04% improvement on the corresponding period in 2022 (Q3 2022: N13.39 billion) PUBLIC
Slide 15: Performance Snapshot (1/2)
Performance Snapshot (1/2) The rise in deposits and other financial liabilities continues to drive growth in total liabilities during the period 21% Total Assets (N’bn) 2,248 1,858 1,629 820 1,299 738 1,183 591 284 597 197 619 125 464 69 364 27 310 51 293 17 18 269 16 654 18 466 542 225 324 2019 202
Slide 16: PUBLIC
PUBLIC
Slide 17: Revenue Evolution
Revenue Evolution Growth in gross earnings by 27.0% was attributed to a combination of a 31.21% and 14.31% increase in interest income and non-interest income respectively. 27.0% Interest Income Non-Interest Income Gross Earnings (N'bn) 152.0 2% Q3 2023 22% 21% 119.7 34 0% 110.0 104.7 19% 101.8 26%
Slide 18: Funding & Liquidity
Funding & Liquidity We recorded an increase in customer deposits to N1.52 trillion and the retention of low-cost deposits at 77% (FY 2022: 71%) FY 2022 Q3 2023 15% Customer Deposits (N’bn) 8% 1,524 5% 1,328 115 16% 1,209 69 239 24% 95 892 320 290 CASA:77% 45 290 CASA:71% 53% 155 243 58% 205 19% 195
Slide 19: Equity & Capital Adequacy
Equity & Capital Adequacy Overall, we maintained a healthy capital position well above regulatory limits Equity (N’bn) 7.58% Share capital Share premium Retained earnings Others 166 154 136 137 56 120 52 53 45 56 45 53 25 34 6 43 43 43 43 43 14 14 14 14 14 2019 2020 2021 2022 Q3 2023 Items (N’m) Sep
Slide 20: Loans and Advances by Sector
Loans and Advances by Sector The manufacturing, education, and transportation sectors contributed to loans and advances growth. Gross Loans & Advances by Sector Sep-23 Dec-22 Growth Sectors N'm % of total N'm % of total % Agriculture 107,203 12.7% 81,264 10.7% 31.9% Communication 22,126 2.6% 21,580
Slide 21: Loans and Advances by Currency – Q3 2023
Loans and Advances by Currency – Q3 2023 …while we continue to effectively manage our FCY loan book as a proportion of the Group’s total loan book Gross Loans & Advances by Currency FCY LCY FCY % of Sectors N'm % of Total N'm % of Total Sector Agriculture 37 0.01% 107,166 18.84% 0.03% Communication
Slide 22: Loans and Advances by Currency – FY 2022
Loans and Advances by Currency – FY 2022 Gross Loans & Advances by Currency FCY LCY Sectors N'm % of Total N'm % of Total FCY % of Sector Agriculture - 0.0% 81,264 13.7% 0.0% Communication - 0.0% 21,580 3.6% 0.0% Consumer 131 0.1% 99,119 16.7% 0.1% Education - 0.0% 4,840 0.8% 0.0% Finance_and_Insura
Slide 23: Asset Quality – NPL by Sector
Asset Quality – NPL by Sector NPL ratio stood at 3.5%, in line with the heightened risk in the macroeconomic environment and our commitment to prudent risk management. NPL by sector (N'm) - Q3 2023 13,970 10,855 N29.8b 1,625 1,307 1,140 730 157 38 22 3 2 0 0 Consumer Oil & Gas Real Estate & Others A
Slide 24: Operating Efficiency
Operating Efficiency There was an increase in operating expenses, particularly from general and administrative expenses and property & equipment. 22.62% Operating Expense (N’bn) 78 4 64 12 4 54 51 49 9 4 24 6 5 6 5 5 19 17 15 14 22 20 13 14 16 12 16 11 11 11 Q3 2019 Q3 2020 Q3 2021 Q3 2022 Q3 2023 P
Slide 25: Profitability
Profitability Overall, the Group grew 23% in profit after taxes to reach N16.5 billion in Q3 2023 compared to the profit of N13.4 billion reported for Q3 2022. 23% 24% PBT & PAT (N’bn) 17.8 16.5 14.4 13.4 9.9 9.5 7.7 7.6 8.0 7.4 Q3 2019 Q3 2020 Q3 2021 Q3 2022 Q3 2023 Profit before Tax Profit after
Slide 26: Key Performance Ratio
Key Performance Ratio Indicator Q3 2023 FY 2022 Q3 2022 FY 2021 Net Interest Margin 9.06% 7.9% 8.0% 7.1% Cost-to-Income Ratio 76.4% 74.5% 75.7% 73.9% Earnings per Share 57K 67k 47k 52k Liquidity Ratio 32.6% 37.2% 31.7% 37.9% Cost of Risk 0.9% 1.0% 0.9% 1.0% Cost of Funds 3.91% 3.6% 3.3% 3.6% Yield o
Slide 27: Come in! We are open.
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Slide 28: Investor Relations
Investor Relations: Ifeoluwa Feyisitan M: +234 802 350 5849 E: ifeoluwa.feyisitan@sterling.ng E: INVESTOR.RELATIONS@sterling.ng
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