Sterling Bank PLC

FY 2010
Investor/Creditor Presentation

April 2011
 Important Information
Investor Relations
This presentation has been prepared by Sterling Bank PLC. It is intended for an audience of professional and institutional
investors who are aware of the risks of investing in the shares of publicly traded companies.

The presentation is for information purposes only and should not be construed as an offer or solicitation to acquire, or dispose
of any securities or issues mentioned in this presentation.

Certain sections of this presentation reference forward-looking statements which reflect Sterling Bank’s current views with
respect to, among other things, the Bank’s operations and financial performance. These forward-looking statements may be
identified by the use of words such as ‘outlook’, ‘believes’, ‘expects’, ‘potential’, ‘continues’, ‘may’, ‘will’, ‘should’, ‘seeks’,
‘approximately’, ‘predicts’, ‘intends’, ‘plans’, ‘estimates’, ‘anticipates’ or the negative version of these words or other
comparable words. Such forward-looking statements are subject to various risks and uncertainties.

Accordingly, there are or may be important factors that could cause actual outcomes or results to differ materially from
those indicated in these statements. Sterling Bank believes these factors include but are not limited to those described in its
Annual Report for the financial year ended December 31, 2009. These factors should not be construed as exhaustive and
should be read in conjunction with the other cautionary statements that are included in this release.

Sterling Bank undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of
new information, future developments or otherwise.

2
 Agenda

1 Corporate Information

2 Macro-economic Trends

3 Financial Highlights

4 Earnings Profile

5 Balance Sheet Analysis

6 Liquidity

3
 Sterling Bank at a Glance
FY 2010 FY 2009 Our Identity
Description
(N’B) (N’B)  Nigeria’s pre-eminent investment
Total Assets 277.1 221.3 banking franchise
Customer Deposits 203.1 161.3  Growing presence in retail banking
Net Loans 103.8 82.9  Strong leadership brands across all
Shareholders’ Fund 26.1 21.1 financial services segments
Common shares  Sound Corporate governance model
12.5 12.5
outstanding
 Excellent technology infrastructure
Capital Adequacy and innovative products
12.7% 12.0%
Ratio (%)
FY 2010 FY 2009*  People-oriented customer-focused
institution – ‘One Customer’ Bank.
Profit before Tax 5.0B (7.2)B  Scale with clear intent. Managed
diversification of the business model
Earnings per Share 40k (72)k
Cost/Income Ratio** 76.3% 211.5%  Long-term stable ownership base to
support strategy
Return on Average
21% (27)%
Equity
* 2009 P & L figures annualized
**Including Allowances for Risk Assets

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 14-Month Share Price Chart
Share Price Movement: Dec 1, 2009 – Jan 31, 2011
31 Jan, 2011
4.00 2.75
1 Dec, 2009
3.00 1.15

2.00

1.00

0.00

Volumes Traded
50.0

40.0

30.0

20.0

10.0

Number of Trades
300
250
200
150
100
50
0
Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan

2009 2010 2011

5
 National Branch Network

Lagos Region: 46
South-South Region: 11
North-West Region: 12
North-Central Region: 9
South West Region: 8
South-East Region: 7
North-East Region: 2
Branches in consideration

National Branch Distribution

6% 2%
9%

10%
49%

11%

13%
6
 Market Focus
We provide a wide range of financial services to a rich customer base with a
focus on three major market segments

Small & Medium Scale  Lending & Deposit Products

Businesses  Financial Advisory Services

Government  Collections & Ancillary Services

(Federal, State & Local
 Mid-Cap Infrastructure Finance
Councils)

Consumer Banking  Asset-based and Personal Finance

7
 Strategic Priorities
Short-term (2010-2012) Long-term (2015+)

 Equity Injection - Minimum US$100mn excl. organic

 Globally competitive financial
accretion
services franchise
 Tap wholesale markets for debt to improve efficiency
 Fully scaled business model
of capital structure
with institutionalized processes
 Double asset market share primarily through organic beyond the stewardship of
growth in local corporate loan book current owners and managers
 Work to bring NPL levels to <10%  Systemically important
 Improve liability generation through the expansion of operator materially impacting
retail distribution footprint all our sectors of business
 > 20% Return on Equity participation

2010 2011 2012 2013 2014 2015

Mid-term (2013-2015)

 3-5% market share measured by assets

 Leading consumer banking franchise (bank of
choice for customers in our target markets)
 Low single digit cost of funds
 Diverse retail funding base
 <5% in non-performing loans
 Diversified income streams with top quartile
position in all our operating areas
 Investment grade credit rating
 Double digit revenue growth Y-o-Y
8
 Macro-economic Trends

9
 Economic Indices
Bonny Light Spot Prices Nigeria Consumer Price Index / Inflation Rate
FOB ($/Barrel) 2011
2010
160 2009
18
140 2008
16
120 14

100 12

80 10
8
60
6
40
4
20
2
0 0
Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10 Jan-11
Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec

Nigeria Oil Supply: 5-year Range Nigerian Naira / US Dollar Average Exchange Rate
2009
mb/d 2010
2010
2009
Range
2.7 2008
(2004-2009) 160
2.5
150

2.3
140

2.1
130

1.9 120

1.7 110

1.5 100
Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec
10
 Funding Ecosystem (Industry)
Central Bank of Nigeria Monetary Policy Rate Nigerian Interbank Offer Rate (NIBOR) Call
7-day
(MPR) 30-day
16% 60-day
90-day
6.40% 14%

6.20% 12%
10%
6.00%
8%
5.80%
6%
5.60%
4%
5.40%
2%
5.20%
0%
5.00% Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec
Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec
2010
2010

Deposit Taking – Savings Accounts Deposit Taking – Fixed Deposit Call

7-day
30-day
4.50% 14% 60-day
4.00% 90-day
12% 180-day
3.50%
270-day
3.00% 10%
360-day
2.50% 8%
2.00%
6%
1.50%
1.00% 4%
0.50%
2%
0.00%
Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec 0%
Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec
2010
2010
11
 Financial Highlights

12
 Key Trends: 5 Year Review

Comments
Gross earnings CAGR: 22%
Total Assets CAGR: 20%  2010 performance was a
Deposits CAGR: 24% reflection of the gradual
Loans & Advances CAGR: 21% 277.11 improvement in economic
249.85
conditions given that the
221.32
banking sector was still
N‘Bn recovering from the difficult
operating conditions of 2009
203.07
176.92  Total assets and net loans
156.74 161.28 and advances (including
advances under finance
lease) grew by 25%
respectively, while deposits
111.77 99.22 grew by 26%.
82.93 103.75
70.25
 However, earnings potential
68.95 49.35 was constrained in 2010 due
to the low interest rate
40.13 regime and fewer profitable
34.34
36.13 37.37 outlets to invest excess
12.86 23.86 liquidity.
Sep 2006 Sep 2007 Sep 2008 Dec 2009 Dec 2010

13
 Key Trends: Q on Q Analysis
N‘M

Gross Earnings
Total Assets
Deposits
Loans and Advances 279,321
277,111

208,126
201,679
195,721 203,075

138,891 145,546

91,054 81,591 90,540 103,754

23,145 34,342
16,289
8,297

Q1 2010 Q2 2010 Q3 2010 Q4 2010

14
 Income Statement
FY 2009*
-8%
FY 2010
Comments

37,374  Revenue decline (8%)

34,342 was driven by the low
11.4%
interest rate regime
experienced for the
-10.6%
greater part of the year
23,265
20,883  Operating income
31.7%
-10.0%
increased 11% on the
17,655 back of improved
15,783
14,111 margins
10,717 10,166
9,154  Operating Expenses
4,955 5,044 declined 11% reflecting
N’ Millions

progress in the Bank’s

cost discipline and
efficiency programs
introduced in 2009

(7,215)  Sustained profitability

achieved in the third
(9,306) quarter

Gross NRFF Other Operating OpEx PBT PAT

Earnings Income Income

*Annualized

15
 Balance Sheet

25%
FY 2009
FY 2010 Comments
25%
277,111
 Recorded growth on all
250,993 key balance sheet lines
26%  Growth spurred by
221,318
203,075
slightly improved
200,245
economic conditions
N’ Millions

 Improvement in Equity
161,277
boosted by profit
25% accretion.
 Commenced the
103,754
process of introducing
82,935 tier 2 capital to further
24%
boost capital position,
while pursuing various
21,074 26,118
options to strengthen tier
1 capital

Total Assets Loans & Total Liabilities Deposits Shareholders'

Advances Equity

16
 Key Financial Ratios
FY 2009* FY 2009
Comments
FY 2010 FY 2010

212%  Return on Average Equity

(ROAE) in the first rank
percentile among all
85% banks
82%
76%
 Strong liquidity and
improved capital position
56% to support business
50% 47% growth
39%
 Drop in Cost-to- income
ratio reinforcing
21% 24%
improvement in
12% 13% 12% operating efficiency
2%  Achieved significant
improvement in asset
-4% quality.

-27%
ROAE ROAA Net Cost- CAR Liquidity NPL Ratio Coverage
Interest Income Ratio Ratio
Margin Ratio

*Annualized

Not drawn to scale

17
 Earnings Profile

18
 Revenues
Revenue Mix Interest Income
Fee Income 34,341
N‘M 6,099 (12 ) 671 2,395
14,480 269 9,153
FY 2010

8,608
25,188
1,831

2,135 2,367 37,375

4,869 796
14,571 662 10,167
FY 2009*

10,060
27,208
1,915

Placements Inv. in Govt Loans & Finance Fees & Forex Investment Others Total Grand Total
Securities Advances Lease Commissions Income

Fees & Commission Interest Income Mix Loans & Advances

Fee-based Income Mix
Forex Finance Lease
Investment
Inv. in Govt Securities
Others
Placements

26% 7% 7%
23% 48%
58%
54%
67%
34%
7%
37%
21% 0%

8% 2% 1%
19 FY 2009* FY 2010 FY 2009* FY 2010
 Operating income
Operating Income 2,395 23,264
6,099 (12 ) 671
N‘M
14,111
FY 2010

11%

2,367 20,884
796 2,135
4,869
FY 2009*

10,717

Net Revenues from Fees & Forex Investment Income Others Total
Funds Commissions

Operating Income Mix NRFF

Fees & Commission
Forex
10% Investment
11% Others
3%
0.1%
10% 51% 61%

4%

26%
23%

FY 2009* FY 2010
20
 Operating Efficiency

-11%
-33% FY 2009* Comments
-64% FY 2010
17,655
16,491  Operating expenses
15,783
212% declined 11% to
N15.8b
N’ Millions

11,076
 Funding cost declined
33% feeding through
76% improvement in Net
Interest Margins
 Significant
improvement in
Operating Expenses Funding Cost Cost to Income relative efficiency on
the back of lower
provisioning and
Operating Expenses Breakdown reduction in operating
Staff Cost
Other Expenses
expenses

29%
30%

70%
71%

FY 2009* FY 2010
21
 Profitability
Profit /(Loss) Before Tax 2009*
N’M 2010
Comments
4,169 5,674 4,955  Return to
592 1,407
profitability
achieved in Q1
2010 was sustained
(6,858) (6,515)
(9,306) through the year
 However, full year
Profit /Loss After Tax profitability was
N’M affected by
3,939 5,343 5,045 allowances for risk
1,272 assets which
482
moved into
negative territory
by N2.6 billion
(6,723) (6,196) (7,216)

Earnings / (Loss) per Share

(kobo)
31 43 40
4 10

(54) (54)
(57)
Q1 Q2 Q3 Q4

22
 Balance Sheet Analysis

23
 Asset Decomposition
37% FY 2009
FY 2010
142,105

25%
103,520 103,754
N’ Millions

82,935

-10%

-13%
29,650
26,725

5,213 4,527

Liquid Assets Loans & Advances Fixed Assets Other Assets

Asset Mix Liquid Assets

Loans & Advances
Fixed Assets
13% 10%
Other Assets
2%
2% 47%
51%

37%
37%
FY 2009 FY 2010
24
 Assets Funding Mix
26% FY 2009 Comments
203,075 FY 2010
 Diversified funding base
161,277 with deposits as the
major funding source
 Deposits funded 73% of
N’ Millions

total assets

76%
-8%
24%
 To keep funding costs
low, deposit mobilization
25,058 24,766 22,860 26,118 was skewed in favour of
14,202 21,074
stable low cost deposits

Deposits Long-term Borrowing Other Liabilities Equity

Asset Funding Mix

Deposits
Long-term Borrowing
10% 9% Other Liabilities
Equity
11% 8%

6% 9%

73% 73%

FY 2009 FY 2010
25
 Deposits
Deposit breakdown
38,965 203,074
N‘M 15,499
71,884
FY 2010

9,580
67,146

26%
12,975 161,277
47,934 7,591

85,846 6,931
FY 2009

Time Savings Demand Domiciliary Interbank Total

Deposit Mix Time

Savings
8% 19%
Demand
5% 33%
Domiciliary
53% Interbank

8%

30%
5%
35%
4%
FY 2009 FY 2010
26
 Gross Loans by Type

Loans & Advances Overdraft

Comments
Term Loan
N‘M
13% Others
Finance Lease  Gross loans and
100% = 114,765 advances improved
100% = 101,306 3,121 13% reflecting gradual
4,556 22,303 return of risk appetite
16,735 limited by fewer lending
opportunities
38,899 61,745
 Term loans grew 59%
and accounted for 54%
41,116 of gross loans
27,597

FY 2009 FY 2010

Loans & Advances by Type Overdraft

Term Loan
4% 3% Others
24% Finance Lease
17% 19%
41%

38% 54%

FY 2009 FY 2010
27
 Gross Loans by Sector

Gross Loans Real Estate & Construction, 33% Oil & Gas, 16%
FY 2010 Manufacturing, 12% Government & Other Public Utilities, 4%
Finance & Insurance, 4% Telecoms, 1%
Transport, 3% Education, 0.2%
Capital Market Operators, 2% Mortgage, 2%
Consumer Credit, 0.002% Agriculture, 2%
N’B Power, 1% General/Others, 20%

1.2 0.2 0.6 0.0

2010

2.8
2.3
2.0
37.7 18.7 13.0 2.5 4.6 3.0 23.2

2483%
-58%

-22%

-33%

-81%

-39%

-57%
-24%
130%

122%

148%

-5%

24%
4%
2009

16.4 8.4 12.5 5.9 5.9 4.4 14.7 3.8 4.6 18.6

0.5 0.3 0.7 0.0

Comment
 Diversified Loan book with focus on Oil & Gas, Real Estate & Construction and
Manufacturing sectors

28
 Non Performing Loans (NPL) by Sector

Gross Loans Oil and Gas, 18% Manufacturing, 16% Capital Market, 7%
FY 2010 Real Estate, 5% Communication, 3% Transportation, 3%
Mortgage, 3% Finance and Insurance, 2% Consumer Credits, 1.4%
Agriculture, 0.6% Education, 0.1% Others, 41%
N’B

0.7 0.1
2010

2.0
1.8
23.2 20.2 9.0 6.9 4.3 4.1 3.8 52.7 12.89

-92%

-43%

-84%

-68%
488%
506%
-3%

-1%
13%

14%
1%

4%
2009

20.6 20.8 108.3 7.0 7.2 10.9 50.7 22.84

0.8 0.6 0.3 0.7 0.3

-44%
FY2009 NPL Breakdown
-16% 22,843
FY2010 -75%

-29% 12,888
10,132 10,624 8,904
2,087 1,485 2,499

Sub-standard Doubtful Lost Total NPLs

29
 Asset Quality

4%
Comments
FY 2009
FY 2010
82.0% 85.4%  Improvement in
asset quality driven
by the purchase of
bad loans by
AMCON and
-50% internal loan
-44%
recovery initiatives.
23.6%  Coverage ratio also
18.0%
11.5% 10.0%
improved from 82%
at FY 2009 to 85%

NPL Ratio Coverage Ratio Provision to Gross Loans

Loans by Performance Performing

Non-Performing
11.5%
23.6%

76.4%
88.5%

FY 2009 FY 2010
30
 Liquidity

31
 Liquidity Profile
Liquid Assets breakdown
N‘M
104,323 142,106
FY 2010

25,099

6,024
6,660

37%
27,506 103,521

57,833
FY 2009

9,608
8,574

Cash Treasury Bills Interbank Investment Securities Total

32
 Strong Liquidity position

FY 2009 Comments
FY 2010
10%
-5%  Liquidity ratio of 47%
above regulatory
50% 51% benchmark of 30%
47% 47%
 Investment Securities
rose on the back fewer
opportunities for quality
risk asset creation.

Liquidity Ratio Liquidity Assets Ratio

Liquid Assets Split

Cash
8% 5% Interbank
Treasury Bills
27% 18% Investment Securities

73%
56%
4%

9%

FY 2009 FY 2010
33
 Thank You

34
 Contacts

Office

20 Marina, Lagos, Nigeria

Tel: 234-(01) 2600420-9; Fax No: 234-(01) 2702310
Website: www.sterlingbankng.com

Investor Contacts

Yemi Odubiyi Abubakar Suleiman

Chief Strategy Officer Group Treasurer / Financial Markets Head
+234 803 535 0991 +234 803 535 1172
yemi.odubiyi@sterlingbankng.com abubakar.suleiman@sterlingbankng.com

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