Sterling Financial Holdings Company Plc reported a 21.0% year-on-year increase in Profit After Tax (PAT) to ₦75.4 billion for the 9-Month (9M) period ended September 2026.
The top-line expansion was anchored by a 34.8% YoY surge in gross interest income to ₦353.8 billion and a 27.6% YoY growth in Non-Interest Revenue (NIR) to ₦101.2 billion, which successfully absorbed a 5.0x YoY jump in credit impairment charges and higher tax liabilities.
Despite the bottom-line growth, Earnings Per Share (EPS) declined 11.4% YoY, reflecting share dilution from the capital raise completed in Q1 2026.
On a quarterly basis, Q3 2026 standalone PAT fell 6.8% QoQ to ₦25.1 billion—despite a 51.2% QoQ jump in Pre-Tax Profit to ₦41.7 billion—driven by a ₦16.7 billion tax charge (inclusive of a ₦9.8 billion deferred tax liability).
During Q3, the holding company also completed its 10-for-1 share capital reconstruction, consolidating its total issued shares from 68.5 billion to 6.85 billion ordinary shares.
Key Fundamental Drivers & Balance Sheet Analysis
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Net Interest Margin (NIM) Expansion: Net interest income expanded 43.9% YoY to ₦205.9 billion, driven by a 47.9% expansion in interest-earning assets. Loan book interest income surged 39.6% YoY to ₦244.4 billion, reflecting a 52.0% YoY growth in gross customer loans.
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Shift in Deposit Structure and Funding Costs: Term deposits rose 64.3% YoY to ₦1.10 trillion, shifting the group’s funding mix. Consequently, the Low-Cost Current Account and Savings Account (CASA) ratio compressed to 70.3% (down from 75.2% in 9M 2025 and 82.4% in FY 2025), lifting overall cost of funds up 40 bps to 5.2%.
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Divergent Non-Interest Revenue Drivers: NIR growth (+27.6% YoY) was supported by non-interest banking lines, including commodity trading (+45.1%), Musharaka non-interest investments (+10.6x), and facility management fees (+39.1%). Conversely, net trading income slipped 6.5% YoY to ₦21.3 billion, dragged down by an 89.8% plunge in fixed-income bond trading gains (to ₦1.5 billion).
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Credit Quality Headwinds and Cost Discipline: A ₦43.1 billion loan impairment charge pushed total credit loss expenses to ₦40.3 billion (5.0x YoY increase), driving the Cost of Risk (CoR) up from 1.1% to 3.4%. However, because total revenue (+38.1%) outpaced operating expenditure growth (+18.3% to ₦169.5 billion), Sterling HoldCo improved its Cost-to-Income Ratio (CIR) by 9.2 percentage points to 55.2%.
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