The 2005 merger of five banks- NAL Bank Plc, Magnum Trust Bank Plc, NBM Bank Limited, Indo-Nigerian Bank Limited and Trust Bank of Africa into Sterling Bank Plc, resulted to a loss of almost N4 billion, the bank said in its 2006 annual report.

The Chairman of the bank, Alhaji Sulaiman Baffa in the report made available to the News Agency of Nigeria (NAN) in Lagos on Wednesday said that the decision to confront the merging banks risk asset portfolio was to enable the product of the merger, Sterling Bank Plc to start afresh. He explained that the consolidation exercise and harmonisation of depreciation policies of the banks involved cost the bank huge sums which he said exerted significant negative impact on the bank's performance in 2006.

According to him, the bank cannot recommend dividend payment for the nine month period ended 30th December, 2006 due to the fact that the earnings from the previous year's operation was used to clean up the books of the bank. The bank's profit after tax of N4, 820,558 in 2005 was gulped by the merger induced book-cleaning exercise, Baffa stated. He, however, explained that the clean up would ultimately result in healthy returns to shareholders in the coming years.

The Group Managing Director of Sterling Bank Plc, Mr Babatunde Dabiri told shareholders present at the bank's annual general meeting in Lagos also on Wednesday that all the five banks involved in the merger were guilty of false disclosure.

Dabiri said the amounts disclosed by the five banks known then as Legacy Banks at the merger table were not what they eventually brought.