#1Sterling Bank Investor Relations EARNINGS PRESS RELEASE APRIL 22, 2014 STERLING BANK PLC RELEASES UNAUDITED RESULTS FOR THE QUARTER ENDED MARCH 31, 2014 Profit before Tax rises 17% to N3.5 Billion Lagos, April 22, 2014 – Sterling Bank Plc (NSE: STERLNBANK/Reuters: STERLNB.LG / Bloomberg: STERLNBA:NL) - the 'Bank' - a full service national commercial bank releases its unaudited results for the quarter ended March 31, 2014. In the Bank's quarterly update to investors and analysts, Yemi Adeola, the Managing Director/ Chief Executive, stated: We started the year on a positive not e, achieving double digit growth on key revenue lines. Net interest income rose by 58% owing to a 31% growth in interest income relative to a modest increase of 8% in interest expense. This resulted in a 35% growth in operating income to N16.2billion. Our profit before tax rose to N3.5 billion, an increase of 17%; while the annualized return on average equity was 20% in line with our medium term strategic objectives. Despite a 5% decline in deposit to N540 billion, we recorded a 30 basis points reduction in cost of funds to 5.6%; reflecting Management's focus on balance sheet efficiency. Loans and advances grew by 5% to N337 billion, while asset qualityremained strong with a non-performing loan ratio of 1.8%. Over the next few quarters, we will continue the upgrade of our physical infrastructure and rollout of conventional and alternative channels in order to deepen market penetration of our products and grow retail deposit market share. Loan growth will remain steady and disciplined with the overall target for the year set at 25%. Q1 2014 Results#2Sterling Bank Investor Relations Financial Highlights • . • . Income Statement Net interest income rose 58.1% to N10.3 billion (Q1 2013: N6.5 billion) feeding from a 30.6% growth in interest income to N18.7 billion Non-interest income also grew by 7.4% to N6.0 billion (Q1 2013: N5.6 billion) driven by a 29.9% growth in trading income to N2.3 billion Net operating income rose 29.7% to N15.2 billion (Q1 2013: N11.7 billion) on the back of growth in net interest income Operating expenses increased 34.0% to N11.6 billion (Q1 2013: N8.7 billion) driven by on-going investments in branch refits and expansion in addition to an increase in AMCON surcharge Profit before tax increased 17.3% to N3.5 billion, while profit after tax was N3.1 billion ☐ Statement of Financial Position Net loans & advances grew 4.8% to N337.2 billion (Dec. 2013: N321.7 billion) driven by growth in corporate lending Customer deposits declined by 5.3% to N540.0 billion (Dec. 2013: N570.5 billion) reflecting Management's focus on balance sheet efficiency Shareholders' funds increased 4.7% to N66.4 billion (Dec. 2013: N63.5 billion) due to profit accretion Overall, total assets excluding contingent liabilities declined marginally by 0.8% to N701.9 billion (Dec. 2013: N707.8 billion) Q1 2014 Results 2#3Sterling Bank Investor Relations Financial Ratios Indicator Pre Tax Return on Average Equity (annualized) Post Tax Return on Average Equity (annualized) Return on Average Assets (annualized) Earnings per Share Yield on Earning Assets Cost of Funds Net Interest Margin Cost to Income NPL Ratio Coverage Ratio Capital Adequacy Ratio Liquidity Ratio Loan to Deposit Ratio Q1 2014 22.6% Q1 2013 25.2% 20.0% 22.7% 2.0% 2.0% 15k 17k 13.2% 11.1% 5.6% 5.9% 7.6% 5.1% 71.7% 72.1% Mar 2014 Dec 2013 1.8% 2.1% 78.0% 80.3% 14.0% 14.0% 62.7% 61.5% 62.4% 56.4% Q1 2014 Results 3#4Sterling Bank Investor Relations STATEMENT TO THE NIGERIAN STOCK EXCHANGE AND SHAREHOLDERS ON THE UNAUDITED RESULTS FOR THE FIRST QUARTER ENDED 31 MARCH 2014 The Board of Sterling Bank Plc presents the Banks's unaudited results for the first quarter ended March 31, 2014. STATEMENT OF FINANCIAL POSITION In thousands of Naira ASSETS Cash and balances with Central Bank Due from banks Pledged assets Loans and advances to Customers Investment in securities: March 2014 December 2013 111,852,077 96,900,562 59,682,388 85,601,022 83,866,812 79,771,732 337,185,440 321,743,748 - Held for Trading 3,768,436 2,200,994 Available for Sale 30,806,038 19,496,194 - Held to Maturity 45,930,041 76,123,934 Other assets 11,974,146 9,317,091 Property, plant and equipment 9,265,444 9,069,368 Intangible assets 594,375 601,392 Deferred tax assets 6,971,145 6,971,145 TOTAL ASSETS 701,896,342 707,797,181 LIABILITIES Deposits from Banks Deposits from Customers Current income tax liabilities Other borrowed funds Debt securities in issue Other liabilities TOTAL LIABILITIES 540,010,018 570,511,097 1,513,754 50,433,730 1,112,289 38,794,527 4,716,135 38,782,137 4,563,598 29,357,774 635,455,775 644,339,285 CAPITAL AND RESERVES Ordinary share capital 10,796,407 10,796,407 Reserves 55,644,161 52,661,489 Attribut able to equity holders of the Bank 66,440,568 63,457,896 TOTAL LIABILITIES AND EQUITY 701,896,343 707,797,181 Q1 2014 Results#5Sterling Bank Statement of Comprehensive Income In thousands of Naira Gross Earnings Interest income Interest expense Net interest income Investor Relations March 2014 March 2013 December 2013 91,628,841 24,621,317 19,844,327 18,659,077 14,290,515 69,972,761 (8,396,956) (7,800,274) (34,160,115) 10,262,121 6,490,241 35,812,646 Net fee and commission 3,315,206 3,317,842 14,564,349 Trading income 2,288,474 1,761,393 3,714,145 Other operating income 358,560 474,577 3,377,586 Operating income 16,224,361 12,044,053 57,468,726 Net impairment charges (1,042,325) (334,496) (8,259,094) Personnel expenses (2,752,502) (2,246,975) (10,266,623) Depreciation and amortisation (712,165) (633,125) (2,694,489) Other operating expenses (8,175,368) (5,809,329) (26,938,321) Profit before income tax 3,542,001 3,020,128 9,310,199 Income tax expense (404,865) (296,929) (1,035,334) 3,137,136 2,723,199 8,274,865 Profit after tax Other comprehensive income Fair value (loss)/gain on available for sale investments (154,464) (61,873) (295,931) Other comprehensive income for the period net of tax (154,464) (61,873) (295,931) Total comprehensive income 2,982,672 2,661,326 7,978,934 Key Ratio Earnings per share (kobo) - Basic Earnings per share (kobo) - Diluted NPL Ratio 15k 17k 38k 15k 17k 38k 1.78% 3.67% 2.10% The Board of Directors is confident that barring unforeseen circumstances, this trend would be improved upon considerably in the remaining period of the financial year. BY ORDER OF THE BOARD пкем Justina Lewa Company Secretary (FRC/2013/NBA/00000001255) Q1 2014 Results 5#6Sterling Bank Investor Relations CONTACTS Investor Contacts Abubakar Suleiman M: +234 803 535 1172 E: [email protected] Media Contact Shina Atilola M: +234 802 342 3011 E: [email protected] Yemi Odubiyi M: +234 803 535 0991 E: [email protected] Chimaobi Nwaokoma M: +234 803 406 6104 E: [email protected] Q1 2014 Results Investor Relations Team E: [email protected] W: http://www.sterlingbankng.com/investor-relations Twitter: Sterlingbank_IR 6#7Sterling Bank Investor Relations About Sterling Bank Sterling Bank Plc is a leading commercial banking establishment in Nigeria. It commenced operations as NAL Bank in 1960. Today, with over N700 billion in assets, more than 165 business offices and over 300 ATMs nationwide, Sterling Bank has grown into a major financial institution. The Bank prides itself as the 'One Customer Bank' that celebrates each customer a unique individual. For further information, please visit http://www.sterlingbankng.com Forward-Looking Statements This release may contain forward-looking statements which reflect Sterling Bank's current views with respect to, among other things, the Bank's operations and financial performance. These forward-looking statements may be identified by the use of words such as "outlook,” “believes,” “expects," "potential,” “continues,” "may," "will," "should," "seeks,” “approximately,” “predicts," "intends,” “plans,” "estimates," "anticipates" or the negative version of these words or other comparable words. Such forward-looking statements are subject to variousrisks and uncertainties. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. Sterling Bank believes these factors include but are not limited to those described in its audited Annual Report for the financial year ended December 31, 2013. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this release. Sterling Bank undertakes no obligation to publicly update or review any forward- looking statement, whether as a result of new information, future developments or otherwise. Q1 2014 Results Sterling Bank PLC Sterling Towers 20, Marina Lagos T: +234 1 2600420-9, 2600850-9 W: http://www.sterlingbankng.com 7#8Sterling Bank Investor Relations Q1 2014 Results 8