Sterling Holdings’ 129% profit surge beats projections in Q1

Sterling Financial Holdings Company Limited has posted a 129 percent surge in after-tax profit for the first quarter of 2025, signalling a robust start to the year amid a stabilising macroeconomic environment.

According to its unaudited financial statements, the group recorded a profit after tax of N17.2 billion, up from N7.5 billion in Q1 2024. This performance outpaced its projection of N11.64 billion as contained in its Q1 earnings outlook.

The impressive growth was driven by a 41.5 percent jump in interest income, which climbed to N78.3 billion from N55.3 billion in the same period last year. Despite the Central Bank of Nigeria maintaining a tight monetary policy stance, interest expenses rose modestly to N30.9 billion, up from N28.1 billion.

All key components of interest income posted gains—loans and advances to customers rose 44.5 percent, cash and cash equivalents soared by 219.1 percent, while debt instruments at fair value dipped 15.5 percent.

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Sterling’s net interest income grew significantly by 74.2 percent to N47.4 billion from N27.2 billion in the first quarter of 2024, while net fee and commission income rose to N10.1 billion, compared to N7.1 billion in Q1 2024.

The top contributors include facility management fees (N1.2 billion), account maintenance fees (N1.7 billion), commission and similar income (N1.4 billion), e-business commission (N2.36 billion), commission on the letter of credit and off-balance sheet transactions (N3.3 billion), and other fees and commission (N2.1 billion).

The holding company during the period reported that other operating expenses increased to N12.3 billion from N9.4 billion, on the back of an increase in the Asset Management Corporation of Nigeria surcharge amounting to N4.4 billion.

Total expenses in the first quarter of the year increased by 31.8 percent to N43.5 billion from N33 billion. Despite the cost pressures, the bank maintained profitability and efficiency, with earnings per share climbing to 38 kobo from 26 kobo year-on-year.

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Total assets grew to N3.6 trillion, while customer deposits reached N2.5 trillion. Loans and advances to customers stood at N1.14 trillion.

However, the quarter also reflected tighter liquidity. Net cash flow from operating activities turned negative at N157 billion, compared to a positive N126 billion a year earlier. Cash used in investing and financing activities also worsened, resulting in negative flows of N125 billion and N40.1 billion, respectively. Still, cash and cash equivalents at period-end rose to N552 billion from N357.2 billion.

“In the third quarter of 2025, Sterling Holdco has projected its after-tax profit to rise to N18.2 billion, interest income to N109.6 billion, and its gross earnings to N142.1 billion,” according to its Q3 Earnings report.