Sterling HoldCo Sees 20% Increase in Earnings Despite Setting Aside Funds for Bad Debts

Sterling Financial Holdings Company Plc saw a significant boost in its profit after tax, which jumped by 20.4 per cent to N50.30bn in the first half of 2026, amid a substantial expansion of its credit portfolio and a notable rise in loan loss provisions.

n

The company's profit after tax for the six months ended 30 June 2026 stood at N50.30bn, marking an increase from N41.78bn in the corresponding period of 2025, with profit before tax also rising by 21.9 per cent to N55.53bn.

n

Gross earnings for the period under review climbed 31.5 per cent to N279.6bn, underscoring the company's growth trajectory, while the group's credit impairment charges skyrocketed to N23.85bn from N5.21bn a year earlier.

n

This surge in credit impairment charges represented a staggering increase of about 358 per cent, primarily driven by the costs associated with supporting an expanding loan book, despite the non-performing loan ratio remaining steady at 4.7 per cent.

n

Interest income witnessed a substantial increase of 33.8 per cent to N223.58bn, fueled by growth in loans and investment securities, which in turn led to a 41 per cent rise in net interest income to N137.39bn.

n

Notably, the increase in net interest income came despite a 23.6 per cent increase in interest expenses, highlighting the company's ability to navigate rising costs and maintain profitability.

n

Customer deposits experienced a significant growth of 21.1 per cent to N3.62tn, while loans and advances increased by 13.7 per cent to N1.61tn, further solidifying the company's position in the market.

n

Total assets expanded by 19.3 per cent to N4.67tn, with shareholders’ funds rising by nearly 28 per cent, largely supported by the successful completion of the group’s rights issue, which provided a substantial boost to the company's financial standing.