#1Investors & Analysts Presentation FY 2021 Sterling#2Disclaimer This presentation has been prepared by Sterling Bank Plc (hereafter referred to as "Sterling Bank", "the Bank", "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 traded companies. ■The presentation is for information purposes only and should not be construed as an offer or solicitation to acquire, or dispose of any securities or issues mentioned in this presentation. ■ Certain sections of this presentation reference 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 various risks and uncertainties. In other cases, they may depend on the approval of the Central Bank of Nigeria, Nigerian Stock Exchange, and the Securities and Exchange Commission. ■ 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 Bank believes these factors include but are not limited to those described in its Annual Report for the financial year ended December 31, 2021.. 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. Sterling Towers#3Content 01 Performance Snapshot (FY 2021) 02 Operating Performance (FY 2021) 03 2021 Scorecard 03 Appendix#4Buy now, PaywithSpecta The smartest, safest and most convenient way to make purchases and pay in installments P PayWith Specta www.paywithspecta.com OOf @myspecta#5Strategic Objectives In line with our business model, we continue to leverage on industry knowledge, advanced technology & ethical financing to empower our stakeholders ííí Strengthened Balance Sheet Strategic Partnerships Workforce Empowerment Differentiated Digital Platforms Maintained a resilient balance sheet with adequate liquidity and capital buffers while improving the quality of our funding base. Forging strategic relationships and using finance and technology to build capacity and scale businesses across The HEART sectors (Health, Education, Agriculture, Renewable Energy and Transportation). In line with our commitment to create a great place to work and institute a knowledge-based culture, we have fully adopted flexible working arrangements enabled by our investments in remote working digital platforms. Our digital platforms (i.e. lending, payments, investments and commerce) have allowed all customers self-serve both online and offline.#6Strategic 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 through Digital Capabilities Stronger governance and underwriting frameworks Stable liability mix and lower cost of funds: CASA Ratio >60% Cost Capital, Optimization Liabilities and Liquidity Buffers Solidify the foundation & calibrate growth (immediate) Continued focus on growing our Retail/ MSE business Accelerate strategic partnerships across the HEART sectors Corporate flows and Cross sell through Transaction banking Continued investment in our people and encouraging a great place to work Predictable and Sustainable Earnings Return value to shareholders Short - Medium Term Objectives#7Financial & Non-Financial Highlights We continued to strengthen our financial position through effective funding optimization and our drive for operational efficiency during the year Financials (N' millions) Total Assets 1,629,129 25.4% from FY 2020 Loans & Advances Customer Deposits 711,900 19.3% from FY 2020 1,208,753 27.1% from FY 2020 Gross Earnings 142,316 4.8% from FY 2020 Net Interest Income 65,784 5.9% from FY 2020 Channels CASA Deposits 823,587 9.7% from FY 2020 Operating Expense 72,830 9.9% from FY 2020 Profit Before Tax 14,474 17.0% from FY 2020 POS ATM USSD Users Branches Customers Professional Staff ATM 0000 *822# 12,383 654 >2.0M 141 >3M 2,404 Ratings MOODY'S Fitch Ratings B2 GCR GLOBAL CREDIT RATING DO BBB B- DataPro Cara Caray BBB+ Key Ratios NPL 0.7% LDR 58.5% Liquidity 37.9% Cost of Funds 3.6% Cost of Risk 1.0% Coverage Ratio 474.2% CAR 14.8%#8Performance Snapshot (1/2) The Bank achieved a 20.2% growth in profit after tax to N13.5 billion (FY 2020: N11.2 billion). 110,975 65,784 (45,191) FY 2021 N'million Increase Decrease Total 31,341 97,125 (9,821) 14,474 13,515 (72,830) (959) Interest income Interest expense Net-Interest Non-Interest income income Operating Impairment income charges Operating expenses Profit before taxation Taxes Profit after taxation FY 2020 N'million Increase Decrease Total 111,452 (49,305) 27,445 89,592 (7,906) 62,147 12,372 11,242 (69,314) (1,130)#9Performance Snapshot (2/2) Rise in customer deposits and other financial liabilities continue to drive growth in total assets and liabilities during the period Total Assets (N'bn) 25.4% 1,629 1,072 598 28 256 16 174 2017 1,299 1,183 1,103 597 712 619 125 621 69 310 51 43 293 17 269 16 260 18 466 17 324 225 161 2018 2019 2020 2021 Cash & short term investments Fixed Assets Government Securities Other Assets ■Loans & Advances Total Liabilities & Equity (N'bn) 1,072 1,299 1,183 1,103 1,629 1,224 972 696 761 893 103 38 213 120 2017 2018 ■Borrowings 120 45 83 2019 141 136 105 62 86 116 2020 2021 Debt Securities Other Liabilities Equity Deposits Sterling Towers#10That 5 minutes madness only you can understand LOANS "5MINS 18 HOY @myspecta www.myspecta.com Specta By Sterling#11Revenue Evolution Our continuous effort to drive down funding cost was evident as the Bank was able to lower its cost of funds further from 4.7% to 3.6% year-on-year. Gross Earnings 4.8% 150.2 148.7 136.0 142.5 133.4 24 23 23 24 24 31 125 127 110 112 111 Interest Income Non-Interest Income FY 2021 16 11% 17% 0% 25% 20% 35% 18% 54% 62% 75% 82% FY 2020 Loans and advances to customers 2017 2018 Interest Income 2019 2020 ■Non Interest Income 2021 ■ Investment securities Cash and cash equivalents Net - Interest Income 5.9% 50 50 65 62 55 66 ■Fees and commission income ☐ Net trading income Other operating income Gross earnings rose by 4.8% driven by a growth of 28.5% in non-interest income. Net interest income grew year-on-year by 5.9% to N65.8 billion (FY 2020: N62.2 billion) largely on the back of 8.3% reduction in interest expense. There was an increase of 28.5% in non-interest revenue largely due to fees & commission income, and other operating income. In total, net operating income grew to 87.3 billion resulting in 11.0% growth. FY 2017 FY 2018 FY 2019 FY 2020 FY 2021#12Funding & Liquidity Increased traction in the mobilization and retention of low-cost deposits contributed to 8.3% decline in interest expense, as we continue to drive funding costs down. Customer Deposits (N'b) FY 2020 FY 2021 27.1% 1,209 95 5% 892 951 16% 290 45 761 70 155 75 205 CASA:79% 284 194 234 121 20% 90 619 556 361 417 8% 24% CASA:68% 90 59% 17% 51% 2018 2019 ■Current ■Savings Tem Cost of Funds (%) 7.4% 2020 ■Pledged Total 2021 6.3% 4.7% 3.6% 2018 2019 2020 2021 There has been a 27.1% growth in customer deposits to reach N1.2 trillion (2020: 951 billion). Consequently, the Bank was able to lower its cost of funds further from 4.7% to 3.6% year-on-year. The bank continued to maintain a healthy liquidity position at 37.9% above minimum regulatory requirement.#13Equity and Capital Adequacy Overall, we maintained a healthy capital position well above regulatory limits Equity (N'b) Share capital Share premium Retained earnings Others 136 120 102 98 144 $56 4.6% 142 2500 25 35 25 43 43 43 43 43 33 14 14 2017 2018 14 14 14 2019 2020 2021 Items (N'mn) Dec. 2021 Dec. 2020 Tier 1 capital* 117,154 104,390 Tier 2 capital** 24,273 34,797 Shareholders funds grew by 4.6% to N142 billion (FY 2020: N136 billion) driven by growth in retained earnings. Total regulatory capital 141,427 139,187 Overall, the Bank's capital adequacy ratio stood at 14.8% as at December 2021 on the back of asset growth. Risk-weighted assets 951,825 771,981 Tier 1 ratio 12.31% 13.52% Tier 2 ratio 2.55% 4.51% Capital adequacy ratio 14.8% 18.0% Notes: *Tier 1 capital includes ordinary share capital, share premium, retained earnings, and other regulatory adjustments relating to items that are included in equity but are treated differently for capital adequacy purposes. **Tier 2 Capital includes qualifying subordinated debt, and element of the fair value reserve relating to unrealized gains on equity instruments classified as Fair Value Through Other Comprehensive Income. Sterling Towers 1 L T#14Loans and Advances by Sector We recorded significant growth in our consumer loans portfolio by 149% and a wind down of our Oil & Gas portfolio. Gross Loans & Advances by Sector Dec-2021 Dec-2020 Growth Sectors N'm % of total N'm % of total % Agriculture 76,727 10.6% 55,471 9.0% 38.3% Communication 17,762 2.4% 16,493 2.7% 7.7% Consumer 91,360 12.6% 36,692 6.0% 149.0% Education 1,369 0.2% 1,551 0.3% -11.7% Finance and Insurance 25,132 3.5% 26,724 4.4% -6.0% Government 101,375 14.0% 84,277 13.7% 20.3% Manufacturing 10,438 1.4% 7,166 1.2% 45.7% Mining & Quarrying 0.0% 0.0% -100.0% Mortgage 3,114 0.4% 3,526 0.6% -11.7% Oil and Gas 170,576 23.5% 200,774 32.7% -15.0% Others 48,437 6.7% 29,431 4.8% 64.6% Power 36,011 5.0% 26,386 4.3% 36.5% Real Estate & Construction 80,940 11.1% 81,596 13.3% -0.8% Transportation 28,239 3.9% 20,419 3.3% 38.3% Non-interest banking 34,600 4.8% 22,852 3.7% 51.4% TOTAL 726,080 100.0% 613,359 100.0% 18.4%#15Loans and Advances by Currency - FY 2021 ...while we continue to effectively manage our FCY loan book under a third of the Bank's total loan book Gross Loans & Advances by Currency FCY LCY Sector N'm % of Total N'm % of Total % of Sector Agriculture Communication Consumer 0.0% 76,727 13.3% 0.0% 0.0% 17,762 3.1% 0.0% 111 0.1% 91,249 15.8% 0.1% Sterling Towers Education 0.0% 1,369 0.2% 0.0% Finance & Insurance 0.0% 25,132 4.4% 0.0% Government 0.0% 101,375 17.5% 0.0% Manufacturing 4,377 3.0% 6,061 1.0% 41.9% Mining & Quarrying 0.0% 0 0.0% 0.0% Mortgage 0.0% 3,114 0.5% 0.0% Oil & Gas 104,943 70.7% 65,633 11.4% 61.5% Others 4,965 3.3% 43,472 7.5% 10.2% Power 235 0.2% 35,775 6.2% 0.7% Real Estate & Construction 15,165 10.2% 65,774 11.4% 18.7% Transportation 6,388 4.3% 21,852 3.8% 22.6% Non-interest banking 12,169 8.2% 22,431 3.9% 35.2% TOTAL 148,354 100.0% 577,726 100.0% 20.4%#16Loans and Advances by Currency - FY 2020 We recorded significant growth in our consumer loans portfolio by 149% and a wind down of our Oil & Gas portfolio. Gross Loans & Advances by Currency FCY LCY Sectors Agriculture Communication Consumer Education Finance and insurance Government N'm % of Total N'm Total FCY % of Sector 55,471 55,471 16,493 16,493 35 0.0% 36,658 36,692 0.1% 1,551 1,551 26,724 26,724 84,277 84,277 Manufacturing 7,166 7,166 Mortgage 3,526 3,526 Oil & Gas downstream 486 0.4% 39,914 40,400 1.2% - Oil & Gas upstream 71,453 51.9% 14,235 85,689 83.4% Oil & Gas Services 36,306 26.4% 38,380 74,687 48.6% Others 0 0.0% 29,430 29,431 0.0% Power 26,386 26,386 Real estate & construction 12,908 9.4% 68,689 81,596 15.8% Transportation 5,456 4.0% 14,962 20,419 26.7% Non-interest banking 11,089 8.1% 11,763 22,852 48.5% TOTAL 137,733 100.0% 475,626 613,359 22.5%#17Asset Quality - NPL by Sector In terms of asset quality, we sustained the significant improvement in our non- performing loans during the period under review reducing to N5.2 billion NPL by Sector (N'm) - FY 2021 2,752 1,285 442 336 225 89 68 Consumer Real Estate & Construction NIB Mortgage Others NPL by Sector (N'm) - FY 2020 4,548 2,597 2,016 N5.2b 6 6 6 5 Oil & Gas Agriculture Transportation Manufacturing Education N11.4b 632 562 545 217 213 71 Real Estate & Construction Oil - downstream Consumer Mortgage Non-Interest Banking Others Agriculture Finance & Insurance Oil & Gas Services Sterling Towers#18Operating Efficiency There is an increase in operating expenses particularly from general and administrative expenses and other operating expenses. Operating Expense (N'b) 71 66 64 7 6 9.9% 73 5 9 55 7 8 8 6 6 5 24 24 23 20 21 17 18 18 21 17 15 12 13 FY 17 FY 18 ■Personnel Others Cost-to-Income (%) ■General & Admin 15 15 FY' 19 FY' 20 Property & Equipment ■Depreciation & Amortisation 81.4% 81.2% 76.6% 75.0% 72.2% FY 17 FY 18 FY' 19 FY' 20 FY' 21 15 FY' 21 The Bank recorded a 9.9% increase in operating expenses reaching N73 billion in 2021 (FY 2020: N66 billion). This was driven primarily by inflation and the depreciation in the currency. Consequently, cost to income ratio (CIR) improved to 75.0% as at FY 2021.#19Profitability Overall, the Bank recorded a profit after tax to N13.5 billion for the year PBT & PAT (N'b) 9.5 9.2 74 8.1 8 FY 17 Pre tax ROAE & ROAA (%) 8.7% 9.5% 20.2% 17.0% 12.4 11.2 10.7 10.6 14.5 13.5 FY 18 FY' 19 FY' 20 FY' 21 Profit before Tax Profit after Tax 10.4% 9.8% 9.7% 0.8% 0.8% 0.9% 1.0% 1.0% FY 17 FY 18 FY' 19 FY' 20 FY' 21 Pre Tax ROAE --ROAA Profit before and after tax stood at N14.5 billion and N13.5 billion respectively. While Pre-tax Return on Average Equity (ROAE) and Return on Assets stood at 9.7% and 1.0% respectively for the period. Sterling Towers#202021 Guidance On Track Not on Track 2021 Target 2021 Actual Deposit growth 5%-10% 27.1% Net loans growth <5% 19.3% Pre-tax Return on average Equity (ROAE) >10% 10.4% Cost-to-income <75% 75% NPL ratio <5% 0.7% Cost of funds <5% 3.6%#21double 韓 GET UP TO 100% RETURNS 100% Visit www.doubble.ng#22CONTENT 01 Key Performance Ratios (FY 2021) 02 Highlight of Income Statement (FY 2021 03 Highlight of Financial Position (FY 2021)#23Key Performance Ratios Indicator Net Interest Margin Cost to Income Earnings per Share Liquidity Ratio Cost of Risk Cost of Funds Yield on Earning Assets FY 2018 FY 2019 FY 2020 FY 2021 6.6% 7.9% 7.7% 8.0% 81.4% 81.2% 76.6% 75% 32k 37k 39k 47k 42.2% 39.5% 34.9% 37.9% 1.0% 0.9% 1.0% 1.0% 7.4% 6.3% 4.7% 3.6% 14.0% 14.2% 12.4% 11.6% Return on Average Assets (Annualized) 0.8% 0.9% 1.0% 1.0% Post-Tax Return on Average Equity (Annualized) 9.2% 9.8% 8.8% 9.7% Sterling Towers Pre-Tax Return on Average Equity (Annualized) 9.5% 9.9% 9.7% 10.4% NPL Ratio 8.7% 2.2% 1.9% 0.7% Coverage Ratio 75.0% 247.0% 236.2% 474.2% Capital Adequacy Ratio 13.3% 14.7% 18.0% 14.8% Loans to Deposit Ratio 81.6% 69.3% 62.4% 58.5%#24Highlights of Income Statement 2021 2020 Growth In millions of naira Gross earnings Interest income N'M % of Total N'M % of Total % 142,316 100.0% 135,835 100.0% 4.8% 110,975 78.0% 111,452 82.0% -0.4% Interest expense -45,191 -31.8% -49,305 -36.3% -8.3% Net interest income 65,784 46.2% 62,147 45.8% 5.9% Fees & commission income 19,359 13.6% 13,087 9.6% 47.9% Net trading income 5,798 4.1% 8,654 6.4% -33.0% Other operating income 6,184 4.3% 2,642 1.9% 134.1% Non-interest income 31,341 22.0% 24,383 18.0% 28.5% Operating Income Impairment charges 97,125 68.2% 86,530 63.7% 12.2% -9,821 -6.9% -7,906 -5.8% 24.2% Net Operating Income 87,304 61.3% 78,624 57.9% 11.0% Personnel expenses -14,917 -10.5% -14,841 -10.9% 0.5% Other operating expenses -20,676 -14.5% -17,939 -13.2% 15.3% General and administrative expenses -23,576 -16.6% -19,914 -14.7% 18.4% Depreciation & amortization -5,145 Other property, plant and equipment Total expenses Profit before income tax Income tax expense Profit after income tax 14,474 -959 -3.6% -8,516 -6.0% -72,830 -51.2% -66,252 10.2% -6,050 -4.5% -15.0% -7,508 -5.5% 13.4% -48.8% 9.9% 12,372 9.1% 17.0% -0.7% -1130 -0.8% -15.1% 13,515 9.5% 11,242 8.3% 20.2% Sterling Towers#25Highlights of Financial Position 2021 2020 Growth ASSETS N'M Cash & balances with CBN 370,873 % of Total 22.8% N'M % of Total % 303,314 23.4% 22.3% Due from banks 94,850 5.8% 21,084 1.6% 349.9% Pledged financial assets Loans and advances Investment securities Other assets 10,786 711,900 0.7% 34,860 2.7% -69.1% 43.7% 596,827 45.9% 19.3% 299,265 18.4% 258,208 19.9% 15.9% 101,405 6.2% 43,950 3.4% 130.7% Right-of-use asset 8,141 0.5% 8,319 0.6% -2.1% Investment property 6,918 0.4% 8,004 0.7% -13.6% Property, plant and equipment 16,939 1.0% 15,956 1.2% 6.2% Intangible assets 1,081 0.1% 1,582 0.1% -31.7% Deferred tax assets 6,971 0.4% 6,971 0.5% 0.0% TOTAL ASSETS 1,629,129 100.0% 1,299,075 100.0% 25.4% LIABILITIES Deposits from Banks 15,568 Deposits from customers 1,208,753 Current income tax payable 1018 Other borrowed funds 116,450 1.0% 74.2% 0.1% 7.1% 21289 950,835 1.6% 73.2% -26.9% 27.1% 551 0.0% 84.8% Sterling Towers 86,367 6.7% 34.8% Debt securities issued 42,327 2.6% 42,274 3.3% 0.1% Other liabilities Lease Liability Provisions 102,282 6.2% 61,492 4.7% 66.3% 60 0.0% 60 0.0% 0.0% 1180 TOTAL LIABILITIES 1,487,638 EQUITY 141,491 TOTAL LIABILITIES & EQUITY 1,629,129 0.1% 91.3% 8.7% 100.0% 454 1,163,322 135,753 1,299,075 0.1% 89.6% 10.4% 100.0% 159.9% 27.9% 4.2% 25.4%#26Investor Relations: Ifeoluwa Feyisitan M: +234 802 350 5849 E: [email protected] Fatima Salau M: +234 806 570 2379 E: [email protected] E: [email protected]