STERLING BANK : AUDITED FINANCIAL STATEMENT FOR 2021

STERLING BANK PLC

Annual Report, Consolidated and Separate Financial Statements

For the year ended 31 December 2021

Table of contents

Page

Report of the Directors 1

Corporate Governance Report 9

Statement of Directors' Responsibilities in Relation to the Preparation

of the Consolidated and Separate Financial Statements 21

Statement of Corporate Responsibility for the Financial Statements 22

Report of the Statutory Audit Committee 23

Independent Auditor's Report 24

Consolidated and Separate Statements of Profit or Loss and Other Comprehensive Income 28

Consolidated and Separate Statements of Financial Position 29

Consolidated and Separate Statements of Changes in Equity 30

Consolidated and Separate Statements of Cash Flows 34

Statement of Prudential Adjustments 35

Notes to the Consolidated and Separate Financial Statements 36

Other National Disclosures:

Statements of Value Added 190

Four-Year Financial Summary - Group 191

Five-Year Financial Summary - Bank 192

STERLING BANK PLC

Annual Report, Consolidated and Separate Financial Statements

For the year ended 31 December 2021

REPORT OF THE DIRECTORS

The Directors have pleasure in presenting to the members of Sterling Bank Plc ("the Bank") their report together with the audited consolidated and separate financial statements for the year ended 31 December 2021.

CORPORATE STRUCTURE AND BUSINESS

Principal activity and business review

Sterling Bank Plc (formerly known as NAL Bank Plc) was the pioneer merchant bank in Nigeria, established on 25 November 1960 as a private limited liability company, and was converted to a public limited liability company in April 1992.

Sterling Bank Plc ("the Bank") is engaged in commercial banking with emphasis on retail and consumer banking, trade services, corporate, investment and non-interest banking activities. It also provides wholesale banking services including the granting of loans and advances, letters of credit transactions, money market operations, electronic and mobile banking products and other banking activities.

Legal form

Following the consolidation reforms introduced and driven by the Central Bank of Nigeria (CBN) in 2004, the Bank emerged from the consolidation of NAL Bank Plc, Indo-Nigerian Bank Limited, Magnum Trust Bank Plc, NBM Bank Limited and Trust Bank of Africa Limited. NAL Bank Plc as the surviving bank adopted a new name for the enlarged entity, 'Sterling Bank Plc'. The enlarged Bank commenced post-merger business operations on 3 January 2006 and the Bank's shares are currently quoted on the Nigerian Stock Exchange (NSE).

In October 2011, the Bank had a business combination with Equitorial Trust Bank Limited to re-position itself to better compete in the market space.

In compliance with the CBN guidelines on the review of the Universal Banking model, the Bank divested its interest from its four (4) subsidiaries and one associate company on 30 December 2011.

In 2016, Sterling Bank Plc registered Sterling Investment Management Plc ("the SPV") with the Corporate Affairs Commission as a public limited liability company. The main objective of setting up the SPV was to raise or borrow money by the issuance of bonds or other debt instruments. The SPV is a subsidiary and is consolidated in the financial statements of the Bank. The Bank and its subsidiary are collectively referred to as "the Group".

The Bank has 160 branches and cash centres as at 31 December 2021.

STERLING BANK PLC

Annual Report, Consolidated and Separate Financial Statements

For the year ended 31 December 2021

REPORT OF THE DIRECTORS - Continued
OPERATING RESULTS
Highlights of the Group and the Bank's operating results for the year ended 31 December 2021 are as follows:
Bank
In millions of Naira	2020
Gross earnings	133,413
Profit before income tax	12,240
Income tax expense	(1,130)
Profit after income tax	11,110
Profit attributable to equity holders	11,110
Total non-performing loans as % of gross loans	2%
Earnings per share (kobo) - Basic	39k
Earnings per share (kobo) - Diluted	39k
Dividend

Group 2021	Bank 2021
142,316	139,922
14,474 (959)	14,343 (940)
13,515	13,403
13,515	13,403
1% 47k 47k	1% 47k 47k

In accordance with the provisions of Section 426 of the Companies and Allied Matters Act 2020, the Directors have proposed a dividend of 10k per share (31 December 2020: 5k per share), translating to a pay-out ratio of 22% (31 December 2020: 13%). The proposed dividend will be presented to shareholders for approval at the next Annual General Meeting and paid subsequently subject to withholding tax at an appropriate rate.

STERLING BANK PLC

Annual Report, Consolidated and Separate Financial Statements

For the year ended 31 December 2021

REPORT OF THE DIRECTORS - Continued

Directors who served during the year

The following Directors served during the year and as at the date of this report:

Name	Designation	Date appointed/retired	Interest represented
Mr. Asue Ighodalo	Chairman	Moehi Nigeria Limited
Dr. (Mrs.) Omolara Akanji	Independent Director
Mr. Michael Ajukwu	Independent Director
Mr. Olaitan Kajero	Non-Executive Director	STB Building Society Limited Eltees Properties Rebounds Integrated Services Limited
Mrs. Tairat Tijani	Non-Executive Director	Ess-ay Investment Limited
Mr. Michael Jituboh	Non-Executive Director	Dr. Mike Adenuga
Mr. Ankala Prasad (Indian)	Non-Executive Director	Appointed 27/4/2021	State Bank of India
Mr. Paritosh Tripathi (Indian)	Non-Executive Director	Appointed 27/4/2021	State Bank of India
Mrs. Folasade Kilaso	Non-Executive Director	Alfanoma Nigeria Limited Plural Limited Reduvita Limited Quakers Integrated Services Limited Concept Features Limited
Mr. Abubakar Suleiman	Managing Director/CEO
Mr. Yemi Odubiyi	Executive Director
Mr. Emmanuel Emefienim	Executive Director
Mr. Tunde Adeola	Executive Director
Mr. Raheem Owodeyi	Executive Director