Our Debt Recovery Efforts Will Reflect in FY 2018 Results—Sterling Bank

By Dipo Olowookere

Sterling Bank Plc has assured its shareholders that its debt recovery efforts would be felt in the 2018 financial year results.

This assurance was given by the bank’s Group Head, Credit Collection and Recovery, Mr Abiodun Aderoju, who said strategies such as restructuring for accelerated payoffs and possible foreclosure or disposal of pledged assets of defaulting debtors will ensure a progressive drop in the bank’s Non-Performing Loan (NPL) ratio which has decreased significantly year on year since 2016.

“Sterling Bank witnessed a 383 percent increase in recoveries between 2016 and 2017. This resulted in a significant improvement in asset quality as reflected in the reduction in non-performing loan ratio by 370 basis points to 6.2 percent in 2017 from 9.9 percent in 2016.

“We are building aggressively on this momentum to ensure that defaulting customers meet their debt obligations to the bank,” Mr Aderoju said.

He added that the bank continues to maintain a disciplined and prudent approach to loan growth in line with its risk management framework.

“The impact of our recovery efforts would be felt by the end of the financial year because it will result in a further drop in our Non-Performing Loan portfolio.

“We are keen on achieving this despite the antics of debtors who take their obligations lightly,” the top banker was quoted as saying in a statement issued by the lender.

According to him, although Sterling Bank’s gross loans and advances in 2017 increased by 29.5 percent to N617.6 billion and net loans and advances by 27.7 percent to N598.1 billion, the bulk of the increase was primarily driven by cash-backed facilities with limited credit risks.

He noted that net loans and advances between 2013 and 2017 increased at a compound annual growth rate of 16.6 percent, adding that loans to corporate entities and organisations increased by 31.1 percent and accounted for 97.6 percent of overall loans disbursed.

Mr Aderoju further said in line with the strategic focus of the bank, agriculture and transportation benefitted from the growth in loans as part of the priority sectors of the bank.

It is becoming common for debtors to exasperate lenders by their resort to subtle blackmail, unfounded allegations and other underhand tactics which include frivolous litigations to delay or avoid meeting their loan obligations, but financial institutions have adopted effective strategies to counter this ploy and recover on the debts owed.