Sterling Bank H1 2026 profit up 22% as loan losses surge

Sterling Bank reported a pre-tax profit of N55.53 billion for the six months ended 30 June 2026, an increase of 21.92% from N45.55 billion in the same period of 2025. But the second quarter alone dipped 1.07% to N27.62 billion from N27.92 billion in Q1 2026, signalling that rising credit losses and operating costs are eating into earnings momentum.

Strong interest income drives top line

Interest income rose 33.75% to N223.58 billion, with loans and advances to customers contributing N153.64 billion or about 68.72% of the total. Income from debt instruments at fair value through other comprehensive income increased by 36.05% to N37.83 billion, while income from cash and cash equivalents jumped 54.25% to N21.00 billion. Net interest income climbed 41.04% to N137.39 billion.

Funding costs grew as well. Interest expense rose 23.57% to N86.18 billion. Customer deposits remained the largest source of funding cost, with related interest expense increasing to N59.34 billion. Returns paid to investment account holders more than doubled to N12.84 billion, showing that the bank paid more to attract and retain funds.

Mixed non-interest income, sharp drop in trading

Net fees and commission income increased by 21.77% to N26.87 billion, supported by facility management fees, account maintenance charges and electronic banking commissions. But net trading income fell 46.49% to N6.96 billion. The decline was largely due to lower bond income and a foreign-exchange revaluation loss of N4.23 billion, compared with a gain of N775 million in the same period of 2025.

Other operating income provided a lift, more than doubling to N22.19 billion. Direct commodity trading income rose to N12.09 billion, while income from Musharaka investments increased to N3.60 billion.

Credit losses and operating expenses pressure profit

The biggest strain came from credit losses. Credit impairment charges jumped to N23.85 billion from N5.21 billion. That meant a larger slice of operating income had to be set aside for possible loan defaults. Operating expenses also rose 23.81% to N114.03 billion, with personnel expenses climbing 40.34% to N33.19 billion.

Basic earnings per share fell 13.48% to 77 kobo from 89 kobo, reflecting the drag from higher impairment charges and costs.

Balance sheet shows deposit strength, loan growth

Customer loans grew 13.75% to N1.61 trillion, while customer deposits increased to N3.62 trillion, equivalent to about 77.5% of total assets. Total assets stood at N4.67 trillion, up 19.30% from N3.91 trillion in December 2025. Total equity rose 27.75% to N547.67 billion. However, cash and balances with the Central Bank of Nigeria fell 5.62% to N718.84 billion.

Sterling Bank’s share price closed at N8.05 on 29 July 2026, up 0.63% from the previous close. The stock had a year-to-date return of 14.18% and a month-to-date return of 3.87%.

What this means for the naira and Nigerian businesses

The sharp jump in credit impairment charges and the foreign-exchange revaluation loss suggest businesses borrowing from Sterling Bank face tighter conditions. Higher provisioning could reduce the bank’s appetite for new lending, while the forex loss points to continued naira volatility. On the positive side, strong deposit growth shows customer confidence remains intact, and the loan-to-deposit ratio of roughly 44% leaves room for expansion if the economy stabilises.