The Managing Director of Sterling Bank Plc, Mr Yemi Adeola, has assured that the bank would pay dividends this year.

Adeola hinged his confidence to pay dividend on the fact that Sterling Bank made enough profit at the end of its half year operations ended March 31, 2008 "to be able to wipe off the goodwill on our books."

He noted that although the bank recorded a profit before tax of N2.226 billion for the year ended September 30, 2007, the directors did not recommend any dividend due to writing off of the goodwill that arose from the merger exercise.

"We carry a goodwill of about N3 billion but we have made enough profit in half year to wipe it off. There is no reason, whatsoever, why Sterling Bank would not be able to pay dividend by end of year three, which is December this year - absolutely no reason. Once the dividend starts rolling in, it cannot stop, it would become a regular feature of the institution. That is the message for shareholders," he said.

The bank posted a profit before tax of N3.69 billion for the half year ended March 31, 2008, up by 178 per cent from the N1.32 billion recorded in the corresponding period of 2007. Profit after tax rose by 178 per cent from N1.112 billion to N3.081 billion. An analysis of the profit showed that Sterling Bank has  already surpassed the N1.938 billion net profit  recorded for the whole of 2007 financial by 59 per cent within six months.

Analysts said that given the half year performance, the bank might end the current year with a net profit of over N8 billion. This is an indication that after writing off the N3 billion goodwill, shareholders would go home with dividend.

While it has been proven in the world business that mergers take three to five years to stabilise, Adeola disclosed that Sterling Bank’s operations have not only been fully integrated but also been stabilised to satisfy all stakeholders.

"We have done two and a half years and we are happy to tell our shareholders that they have a stable bank. They have a bank whose capital is unimpaired by losses. Once your capital is unimpaired, it means whatever profit you make is yours and you can declare dividend from it. Sterling Bank is a stable bank with a stable management and board.

"The bank’s profitability is increasing quarter by quarter and things can only get better for the shareholders. They have sacrificed enough and I believe that the returns on investment will start coming from the end of this year," Adeola said.

Sterling Bank’s balance sheet to March 2008 is in excess of N250 billion while shareholders funds as at September 2007 stood at N27.9 billion.

The bank is at present operating from 100 braches and 50 Automated Trading Machines (ATMs) spread across the country. After the conclusion of banking consolidation, Sterling Bank commenced operations in January 2006 with the strategic vision of becoming Nigeria’s leading diversified financial institution with dominance in chosen markets. 

Analysts said that the bank has implemented strategies geared towards refocusing the institution to meet the unfolding challenges in the banking industry and to unleash the synergies arising from the business combination of the five legacy banks.

A diversified financial institution providing comprehensive services in the investment banking, consumer banking, trade, finance, stock brokerage and other financial services to a broad range of customers, Sterling Bank is ably represented in the finance-related sector of the Nigerian economy through affiliates and subsidiaries that rank amongst the top names in the sector. Such subsidiaries include Sterling Capital Markets, Nigerian Stockbrokers Limited, Sterling Asset Management Limited and SBG Insurance Brokers Limited.

This relationship has continued to give the bank the competitive advantage through the provision of value-added services in areas such as investment, banking, asset management, insurance and mortgage banking, thereby positioning it as a one-stop shop where customers can have all their financial needs met.