Kayode Ekundayo
23 June 2008
Lagos — Sterling Bank has posted a profit before tax of N3.69 billion for the half year ended March 31, 2008, up by 178 per cent from the N1.32 billion recorded in the corresponding period of 2007. Profit after tax rose by 178 per cent from N1.112 billion to N3.081 billion.The bank had last year recorded a profit before tax of N2.226 billion for the year ended September 30, 2007, but the directors did not recommend any dividend.
According to the bank's Managing Director Yemi Adeola, shareholders of the bank should expect bountiful dividend this year. He said the reason why the bank could not pay dividend last year was due to writing off of the goodwill that arose from the merger exercise.
Adeola said: "We have made enough profit by half year ended March 31, 2008 to be able to wipe off the goodwill on our books. We carry a goodwill of about N3 billion but we have made enough profit in half year to wipe it off. There is no reason, whatsoever, why Sterling Bank would not be able to pay dividend by end of year , which is December this year - absolutely no reason. Once the dividend starts rolling in, it cannot stop, it would become a regular feature of the institution. That is the message for our shareholders," he said.
Analysis of the profit showed that Sterling Bank has already surpassed the N1.938 billion net profit recorded for the whole of 2007 financial by 59 per cent within six months.
Analysts say given the half year performance, the bank may end the current year with a net profit of over N8 billion. This is an indication that after writing off the N3 billion goodwill, shareholders would go home with dividend.
While it has been proven in the world business that mergers take three to five years to stabilise, Adeola disclosed that Sterling Bank's operations have not only been fully integrated but also been stabilised to satisfy all stakeholders.
"We have done two and a half years and we are happy to tell our shareholders that they have a stable bank. They have a bank whose capital is unimpaired by losses. Once your capital is unimpaired, it means whatever profit you make is yours and you can declare dividend from it.
Sterling Bank is a stable bank with a stable management and board.
"The bank's profitability is increasing quarter by quarter and things can only get better for the shareholders. They have sacrificed enough and I believe that the returns on investment will start coming from the end of this year," Adeola said.
Sterling Bank's balance sheet to March 2008 is in excess of N250 billion while shareholders funds as at September 2007 stood at N27.9 billion.
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