November 2011 Investor Relations This presentation has been - PowerPoint PPT Presentation

November 2011

Investor Relations This presentation has been prepared by Sterling Bank PLC. 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’, ‘ see ks’, ‘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. 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 audited Annual Report for the financial year ended December 31, 2010. 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. 2

1 Macro-economic & Market Trends 2 Performance Review 3 Business Case for ETB Acquisition 4 Strategic Outlook 3

1 Macro-economic & Market Trends 4

Economic Indices Bonny Light Spot Prices Nigeria Consumer Price Index / Inflation Rate High: Close FOB ($/Barrel) 29 July, 2011 CPI 30 Sep, 2011 $120.0 $108.9 140.0 Open: 14.0 1 July, 2011 120.0 $110.2 12.0 100.0 Low: 10.0 12 Aug, 2011 80.0 $108.1 8.0 60.0 6.0 40.0 4.0 20.0 2.0 0.0 0.0 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Sep-10 Oct-10 Nov-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Sep-11 Aug-10 Dec-10 Aug-11 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Nigeria Oil Supply: 5-year Range Nigerian Naira / US Dollar Average Exchange Rate mb/d Exchange rate 2008 2009 2010 2011 2.4 160 2.3 158 156 2.2 154 2.1 152 2.0 150 1.9 148 1.8 146 1.7 144 Jan-10 Feb-10 Mar-10 May-10 Jun-10 Jul-10 Sep-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 May-11 Jun-11 Jul-11 Sep-11 Apr-10 Aug-10 Oct-10 Apr-11 Aug-11 1.6 Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec Jan 5

Funding Ecosystem (Industry) Central Bank of Nigeria Monetary Policy Rate Nigerian Interbank Offer Rate (NIBOR) (MPR) 16% 14% 9.50% 12% 9.00% 10% 8.50% 8.00% Call 8% 7-day 7.50% 6% 30-day 7.00% 60-day 4% 6.50% 90-day 6.00% 180-day 2% 360-day 5.50% 0% 5.00% Jan Feb Mar Apr May Jun Jul 2011 Aug Sep Jan Feb Mar Apr May Jun Jul 2011 Aug Sep 2011 2011 2011 2011 2011 2011 2011 2011 2011 2011 2011 2011 2011 2011 2011 2011 Deposit Taking & Lending Deposit Taking – Fixed Deposit 30-day 90-day Inter-bank call rate 180-day Savings Deposite Rate 360-day Prime Lending Rate 6% Max Lending Rate 25.00% 5% 20.00% 4% 15.00% 3% 10.00% 2% 1% 5.00% 0% 0.00% Jan Feb Mar Apr May Jun Jul 2011 Aug Sep Jan Feb Mar Apr May Jun Jul 2011 Aug Sep 2011 2011 2011 2011 2011 2011 2011 2011 2011 2011 2011 2011 2011 2011 2011 2011 6

Share Price Chart Share Price Trend 1Jul, 2011 4Jan, 2011 N1.84 Low: 30 Sep, 2011 N2.40 28 Sep, 2011 N1.26 4.00 N1.15 3.00 2.00 1.00 0.00 Volumes Traded (# Millions) 40.0 30.0 20.0 10.0 - Number of Trades 200 150 100 50 0 Dec Jan Feb Mar Apr May Jun Jul Aug Sep 2010 2011 7

Market Movement Sterling Share Price Movement vs. NSE All Share Index Sterling Bank All Share Index Low: 50% 28 Sep, 2011 30 Sep, 2011 1Jul, 2011 High: 40% N1.15 N1.26 1Jul 2011 N1.84 ANSI: ANSI: 30% N1.84 ANSI: 20373.00 20029.66 25875.31 ANSI: 20% 24696.83 10% 0% -10% -20% -30% -40% -50% Jun 2011 Jul 2011 Aug 2011 Sep 2011 Oct 2011 NSE All Share Index vs. the MSCI Frontier Markets Africa Index MSCI FM Africa Index All Share Index 50% 40% 30% 20% 10% 0% -10% -20% -30% Jun 2011 Jul 2011 Aug 2011 Sep 2011 Oct 2011 Source: MSCI 8

2 Performance Review 9

Key Trends N‘M Gross Earnings Total Assets Deposits Loans and Advances % Change Sep ’10–Sep ‘11 314,014 295,992 279,321 277,111 280,756 12% 225,076 209,057 203,075 201,667 195,721 15% 132,950 124,296 103,754 109,647 47% 90,540 9,103 9,880 11,197 9,055 44% 6,856 Sep 2010 Dec 2010 Mar 2011 Jun 2011 Sep 2011 10

Income Statement highlights Comments Q3 2010  Double digit growth in Q3 2011 revenues driven by 21% improvement in both 28,038 interest and non-interest income 23,145  Growth in operating 32% income boosted by NIM expansion 18,095  Increase in operating 16% expenses due largely to inflationary pressures 13,802 13,738 N’ Millions 37%  Profit before exceptional 26% 11,882 item grew 91% to N2.9 9,824 -31% billion. 8,271 7,161  Decline in PBT largely due 6,577 91% 5,343 to N4.2bn loan recovery 3,680 that boosted net earnings 2,880 in 2010. Core earnings 1,505 excluding exceptional income was N2.9bn. * Gross NIM Other Operating OpEx PBT PAT Earnings Income Income * Before Exceptional Item 11

Balance Sheet highlights Comments Dec 2010 Sep 2011 13%  Continuous growth in key 314,014 10% balance sheet lines spurred by slightly 276,706 277,111 improved operating 11% 250,993 conditions 225,076  Total assets and N’ Millions 203,075 contingencies rose 14% to N371.9b from N326.0b in 28% Dec. 2010 132,950  Loans and advances grew by 28% despite sale of 103,754 loans to AMCON. 43%  Loans sold to AMCON in the tranche II process at 37,308 N10.4bn, 9% of gross loans 26,118 as at Dec. 2010  Growth in capital & Total Assets Loans & Total Liabilities Deposits Capital & Reserves resulted from Advances Reserves profit accretion and N7.5bn subordinated note issuance. 12

Key Financial Ratios Comments Dec 2010 Q3 2010 Sep 2011 Q3 2011  Return on Average Equity 108% stood at a competitive level of 18% 86% 85%  Net Interest Margin rose to 76% 51% feeding from a 28% improvement in interest income 58% 51%  Strong improvement in 47% 47% liquidity ratio despite tighter monetary policy 30% measures 18% 16% 13%  Improvement in capital 12% adequacy ratio to support 4% 2% 2% business growth  NPL ratio at 3.9% in line with our medium term goals ROAE ROAA Net Cost- CAR Liquidity NPL Ratio Coverage  Coverage ratio stood at Interest Income Ratio Ratio 108% Margin Ratio 13

Revenues Interest Income Revenue Mix 28,037 Fee-based Income 1,446 8,271 1,411 N‘M 414 5,000 320 319 11,349 Q3 2011 28,037 7,479 19,766 299 21% 6,577 23,146 1,167 2,178 58 3,174 1,312 322 9,024 Q3 2010 23,146 4,261 16,569 1,650 Placements Inv. in Govt Loans & Finance Write-back Fees & Forex Investment Others Total Grand Total Sec. Advances Lease Comm. Inc. Fees & Commission Loans & Advances Fee-based Income Mix Interest Income Mix Forex Finance Lease Investment Inv. in Govt Securities Others Placements Write-back 10% 17% 18% 55% 2% 2% 8% 48% 61% 26% 17% 57% 38% 33% 5% 2% 1% 2% 14 Q3 2010 Q3 2011 Q3 2011 Q3 2010

Operating income Operating Income 1,446 18,095 1,411 5,000 414 N‘M 9,824 Q3 2011 32% 1,167 13,738 2,178 58 3,174 Q3 2010 7,161 Net Interest Margin Fees & Forex Investment Income Others Total Commissions Operating Income Mix NIM Fees & Commission Forex Investment 8% 8% Others 8% 0.0% 52% 2% 54% 28% 23% Q3 2010 Q3 2011 15

Operating Efficiency Comments Q3 2010 16% -12% Q3 2011 13,802 19%  Funding costs impacted 86% 11,882 by high interest rates resulting from tight 9,622 N’ Millions 76% monetary policy 8,094 measures of the CBN.  However, weighted average cost of funds remained relatively stable at 5%  Reduction in cost to * Operating Expenses Funding Costs Cost to Income * excl. allowances for risk assets income ratio reflecting improvement in revenues Operating Expenses Breakdown  Efficiency will improve Staff Cost significantly as we tap Other Expenses cost and revenue benefits 30% 30% from economies of scale and operational synergies arising from business combination with ETB 70% 70% Q3 2010 Q3 2011 16