STERLING BANK: TWO OBSTACLES.

There are two major bridges Sterling Bank PLC will have to cross if it hopes to end financial year 2015 with bright colours. That is, given the figures to September released not too long ago.
These are interest expense which drained a fair 11.6% increase in interest income all of it's shine and provision for loan loss.
From the figures interest expense stood at N31124.1m by September compared to N24534.2m previously. Meanwhile, interest income' s rise to N61293.8m from N54927.2m had helped gross earnings to close 12% up at N81811.6m from N73032.8m.
Added to this pressure. was the 50.4% provision for loan loss increase to N5237.9m from N3482m.
If not for these two obstacles, the 3.39% rise in operating expense to  N37145.5m, being much lower than the gross earnings growth would resulted in higher profit helped of course by 11.4% increase in investment and other income to N20517.8m.
In the end, Sterling Bank's Profit before tax by September dropped by 2.34% to N8304.5m from N8502.7m.
THUS:
* perhaps growth in loan loss provision may slow down in the third quarter, after all Loans and advances was down by 14.8% by September.
* If not any change in fortune may only come from interest expense control.

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