Sterling Holdings FY2025 profit soars by 89% despite rising credit losses

Sterling Financial Holdings Company Plc has reported a sharp rise in profitability for the financial year ended December 31, 2025, as robust interest income and expanding fee-based revenue streams offset rising impairment charges and elevated operating costs.

According to audited results filed with the Nigerian Exchange on Friday, May 15, 2026, the financial services group posted a profit before tax of N86.78 billion, representing an 89.19 per cent year-on-year increase from N45.86 billion in 2024.

Profit after tax also rose strongly by 74.74 per cent to N76.33 billion, driven by broad-based earnings expansion across core banking operations, even as credit impairment charges and costs continued to climb.

Gross earnings climbed to N486.80 billion, up 44.37 per cent from N337.19 billion in the previous year, reflecting improved loan book performance, stronger yields on investment securities, and rising customer transaction volumes.

Interest income remained the dominant driver, rising 41.82 per cent to N367.07 billion, accounting for the bulk of revenue generation. Growth was supported by loan book expansion and higher returns on government securities.

However, interest expenses also rose by 27.75 per cent to N158.42 billion, though at a slower pace than income growth. This helped push net interest income up by 54.79 per cent to N208.65 billion, strengthening core banking profitability.

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Non-interest income also contributed meaningfully, with net fee and commission income increasing 28.83 per cent to N43.70 billion, boosted by higher digital transactions, trade services, and retail banking activity.

Despite the strong top-line growth, credit loss expenses surged sharply by 205.38 per cent to N32.92 billion, reflecting heightened prudential provisioning amid macroeconomic risks.

Operating costs also remained elevated, with analysts pointing to rising staff expenses, administrative costs, and corporate obligations as key pressure points on margins.

The widening gap between gross earnings and pre-tax profit highlights the impact of cost absorption across the group’s operations, even as revenue momentum remained strong.

Total assets rose 10.45 per cent to N3.91 trillion, while total liabilities increased at a slower pace of 7.74 per cent to N3.48 trillion, indicating measured balance sheet expansion.

Loans and advances grew significantly by 28.18 per cent to N1.41 trillion, driven largely by increased lending to retail and SME segments. Customer deposits also rose 18.52 per cent to N2.98 trillion, supporting liquidity stability.

Shareholders’ funds rose sharply by 74.79 per cent to N76.33 billion, supported by strong retained earnings growth.

Financial analysts say Sterling’s performance reflects a classic “interest-rate-driven banking cycle,” where high yields on loans and government securities continue to support earnings, even as credit costs rise.

One Lagos-based banking analyst noted that the strong net interest income growth of over 50 per cent shows effective asset repricing and improved loan book efficiency, particularly in a high-yield environment.

However, analysts also warned that the 205 per cent spike in impairment charges signals rising stress in parts of the loan portfolio, especially within SME and consumer segments exposed to inflationary pressures.