STERLING FINANCIAL : QUARTER 5 FINANCIAL STATEMENT FOR 2023

STERLING FINANCIAL HOLDINGS COMPANY PLC

ANNUAL REPORT, CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS

31 DECEMBER 2023

STERLING FINANCIAL HOLDINGS COMPANY PLC
Annual Report, Consolidated and Separate Financial Statements
	For the year ended 31 December 2023
TABLE OF CONTENT
	Page
Report of the Directors	1
Corporate Governance Report	10
Statement of Directors' Responsibilities in Relation to the Preparation
of the Consolidated and Separate Financial Statements	17
Statement of Corporate Responsibility for the Financial Statements	18
Report of the Statutory Audit Committee	19
Report on Corporate Governance Review	20
Independent Auditor's Report	21
Consolidated and Separate Statements of Profit or Loss and Other Comprehensive Income	26
Consolidated and Separate Statements of Financial Position	27
Consolidated and Separate Statements of Changes in Equity	28
Consolidated and Separate Statements of Cash Flows	32
Statement of Prudential Adjustments	33
Notes to the Consolidated and Separate Financial Statements	34
Other National Disclosures:
Statements of Value Added	185
Five-Year Financial Summary - Group	186

STERLING FINANCIAL HOLDINGS COMPANY PLC

Annual Report, Consolidated and Separate Financial Statements

For the year ended 31 December 2023

REPORT OF THE DIRECTORS

The Directors have pleasure of presenting to the members of Sterling Financial Holdings Company Plc ("the Holdco") their report together with the audited consolidated and separate financial statements for the year ended 31 December 2023.

CORPORATE STRUCTURE AND BUSINESS

Principal activity and business review

The principal activity of Sterling Financial Holdings Company Plc (the Company) is to carry on business as a non-operating financial holding company investing in companies as may be approved by the Board of Directors and in accordance with Central Bank of Nigeria permissible activities. The Company has 2 (two) subsidiaries - Sterling Bank Ltd, a commercial bank and The Alternative Bank Limited, a non-interest bank.

Legal form

Sterling Financial Holdings Company Plc was incorporated on 13 October 2021 as a private limited liability company and reregistered as a public company on 16 November 2022. The Company's shares were listed on Nigerian Exchange Limited on 6 April 2023. The Central Bank of Nigeria issued the Company its final license on 27 June 2023 and it (the Company) commenced operations on 1 July 2023.

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STERLING FINANCIAL HOLDINGS COMPANY PLC

Annual Report, Consolidated and Separate Financial Statements

For the year ended 31 December 2023

REPORT OF THE DIRECTORS - Continued

OPERATING RESULTS

Highlights of the Group and the Company's operating results for the year ended 31 December 2023 are as follows:

	Group		Group	*Company		*Company
In millions of Naira	2023	2022		2023	2022
Gross earnings	221,773		175,140		14,895		-
Profit before income tax	22,693	20,757		13,116	-
Income tax expense	(1,109)		(1,459)		(9)		-
Profit after income tax	21,584		19,298		13,107		-
Profit attributable to equity holders	21,584		19,298		13,107		-
Total non-performing loans as % of gross loans	5%	4%		-	-
Earnings per share (kobo) - Basic	75k		67k	46k	-
Earnings per share (kobo) - Diluted	75k		67k	46k	-
Dividend
The Directors did not propose any dividend for the year 2023.

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STERLING FINANCIAL HOLDINGS COMPANY PLC

Annual Report, Consolidated and Separate Financial Statements

For the year ended 31 December 2023

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
			Alfanoma Nigeria Limited
			Plural Limited
Mr. Adeyemi Adeola	Chairman	Appointed 27/06/2023	Reduvita Limited
			Quakers Integrated Services Limited
			Concept Features Limited
Ms. Eniye Ambakederemo	Independent Director	Appointed 27/06/2023
			STB Building Society Limited
Mr. Adeshola Adekoya	Non-Executive Director	Appointed 27/06/2023	Eltees Properties
Rebounds Integrated Services Limited
Ms. Aisha Bashir	Independent Director	Appointed 27/06/2023
Mr. Abubakar Suleiman	Non-Executive Director	Appointed 27/06/2023
Mr. Yemi Odubiyi	Group Managing Director	Appointed 27/06/2023
Mr. Olayinka Oni	Executive Director	Appointed 27/06/2023

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STERLING FINANCIAL HOLDINGS COMPANY PLC

Annual Report, Consolidated and Separate Financial Statements

For the year ended 31 December 2023

REPORT OF THE DIRECTORS - Continued

Going concern

The Directors assess the future performance and financial position of Sterling Financial Holdings Company Plc (Holdco) and its subsidiaries (the Group) on an ongoing basis and have no reason to believe that the Group will not be a going concern in the next twelve months from the date of this report. For this reason, these consolidated and separate financial statements are prepared on a going-concern basis.

Director's interests in shares

Interest of directors in the issued share capital of the Holdco as recorded in the Register of members and/or as notified by them for the purpose of Section 301 of the Companies and Allied Matters Act 2020 were as follows:

		31-Dec-23	31-Dec-23	31-Dec-22	31-Dec-22
	Names	Direct	Indirect	Direct	Indirect
1	Mr. Adeyemi Adeola	57,600,025	1,443,034,413	-	-
2	Ms. Eniye Ambakederemo	-		-	-
3	Mr. Adeshola Adekoya	-	1,413,979,057	-	-
4	Ms. Aisha Bashir	-		-	-
5	Mr. Abubakar Suleiman	397,188,499		-	-
6	Mr. Yemi Odubiyi	351,417,493		-	-
7	Mr. Olayinka Oni	4,341,618		-	-

Director's interests in contracts

For the purpose of Section 303 of the Companies and Allied Matters Act, 2020, none of the current Directors had direct or indirect interest in contracts or proposed contracts with the Group during the year.

Director's Remuneration

The Group ensures that remuneration paid to its Directors comply with the provisions of the codes of corporate governance issued by its regulators.

In compliance with Section 16.8 of the Nigerian Code of Corporate Governance, the Bank hereby disclose the remuneration paid to its Directors as follows:

	Type of Package Fixed	Description	Timing
1	Basic Salary	Part of gross salary package for Executive Directors only, reflects	Paid monthly
		the banking industry competitive salary package and the extent to	during the
		which the Bank's objectives have been met for the financial year	financial year
2	Other Allowances	Part of gross salary package for Executive Directors only, reflects	Paid periodically
		the banking industry competitive salary package and the extent to	during the
		which the Bank's objectives have been met for the financial year	financial year
3	Productivity Bonus	Paid to Executive Directors only and tied to performance of their	Paid annually in
		line reports. It is also a function of the extent to which the Bank's	arrears
		objectives have been met for the financial year
4	Director Fees	Paid semi-annually in January and July to Non-Executive Directors	Paid semi-
		only	annually in
			January and July
5	Sitting Allowances	Allowances paid to Non-Executive Directors only for attending	Paid after each
		Board and Board Committee meetings	meeting

Beneficial ownership

The Company is owned by Nigerian citizens, corporate bodies and foreign investors.

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STERLING FINANCIAL HOLDINGS COMPANY PLC

Annual Report, Consolidated and Separate Financial Statements

For the year ended 31 December 2023

REPORT OF THE DIRECTORS - Continued

Analysis of shareholding

The range analysis of the distribution of the shares of the Holdco as at 31 December 2023 is as follows:

Range of shares				Number	%	Number	%
				of holders		of units
1	-	1,000		33,277	37.68%	14,724,826	0.10%
1001	-	5,000		26,029	29.47%	58,700,356	0.20%
5,000	-	10,000		8,853	10.02%	59,941,672	0.20%
10,001	-	20,000		7,056	7.99%	95,690,344	0.30%
20,001	-	50,000		5,086	5.76%	159,573,819	0.60%
50,001	-	100,000		3,068	3.47%	214,228,419	0.70%
100,001	-	200,000		1,962	2.22%	281,830,783	1.00%
200,001	-	500,000		1,603	1.81%	502,262,182	1.70%
500,001	-	10,000,000		1,269	1.44%	2,129,955,212	7.40%
Above 10,000,001				114	0.13%	14,824,307,721	51.50%
Foreign shareholding				4	0.01%	10,449,202,790	36.30%
				88,321	100.00%	28,790,418,124	100.00%

The following shareholders have shareholding of 5% and above as at 31 December 2023:

					31-Dec-23	31-Dec-23	31-Dec-22			31-Dec-22
					Unit holding	% holding	Unit holding			% holding
Silverlake Investments Limited	7,197,604,531	25.00	-			-
State Bank of India					2,549,505,026	8.86	-			-
Dr. Mike Adenuga	1,620,376,969	5.63	-			-
Ess-ay Investments Limited	1,462,919,568	5.08	-			-

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STERLING FINANCIAL HOLDINGS COMPANY PLC

Annual Report, Consolidated and Separate Financial Statements

For the year ended 31 December 2023

REPORT OF THE DIRECTORS - Continued

Donations and Charitable Gifts

The Bank donated a total sum of N351.4million during the year ended 31 December 2023 (2022: N281million) to various charitable organizations in Nigeria, details of which are shown below. No donation was made to any political organization.

Details of Donation		Amount
Purpose	(N'm)
Bendel Insurance FC Sponsorship	Sponsorship	75.0
Ake Arts and Book Festival	Sponsorship	40.3
Made By Nigeria X EDF Fusion	Sponsorship	30.0
Mamabase Maternal Health Project	Corporate Social Responsibility	30.0
Film Lab Africa British Council Partnership	Corporate Social Responsibility	20.0
Nigeria Immigration Service	Sponsorship	20.0
Africa Social Impact Summit Support	Corporate Social Responsibility	19.6
Education Support/Collaboration for Schools and
Organisations	Corporate Social Responsibility	18.6
Environmental Makeover - Beach Adoption Project	Corporate Social Responsibility	18.0
Kano Trade Fair	Corporate Social Responsibility	10.0
Start 2 Scale Summit	Sponsorship	8.5
Housing and Urban Development Summit	Sponsorship	7.0
Flood Victims Support	Sponsorship	7.0
Women Empowerment and Advocacy against Gender-
Based Violence	Corporate Social Responsibility/Sponsorship	6.5
Food Related Projects	Corporate Social Responsibility/Sponsorship	6.5
Collaboration/Partnership on Environmental	Corporate Social Responsibility/Sponsorship	5.9
Sponsorship of Conferences on Youth Development	Sponsorship	5.5
Peace and Unity Convention	Sponsorship	5.0
6th African International Conference on Islamic
Finance (AlCIF)	Sponsorship	5.0
Kaduna Books and Arts Festival	Sponsorship	2.0
AltBank/Ogoni Agricultural Community Support
Program	Corporate Social Responsibility	1.4
Other Donations and Collaborations	Corporate Social Responsibility/Sponsorship	9.8
		351.4

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STERLING FINANCIAL HOLDINGS COMPANY PLC

Annual Report, Consolidated and Separate Financial Statements

For the year ended 31 December 2023

REPORT OF THE DIRECTORS - Continued
Gender Analysis of Staff
Analysis of staff employed by the Group during the year ended 31 December 2023
GROUP
DESCRIPTION		% TO
	TOTAL STAFF
	NUMBER
Female new hire	487	47.5%
Male new hire	539	52.5%
Total new hire	1,026	100.0%
Female as at 31 December 2023	1,355	44.5%
Male as at 31 December 2023	1,687	55.5%
Total staff	3,042	100.0%

Analysis of top management positions by gender as at 31 December 2023:

GRADE	FEMALE	MALE	TOTAL
Senior Management (AGM -GM)	12	38	50
Middle Management (DM - SM)		109	222	331
TOTAL	121	260	381

Analysis of Executive and Non-Executive positions by gender as at 31 December 2023:

GRADE	FEMALE	MALE	TOTAL
Executive Director	-	4	4
Managing Director	-	3	3
Non-Executive Director	8	13	21
TOTAL	8	20	28

Total remuneration of the Group's Senior Management (Assistant General Managers, Deputy General Managers, General Managers and Executive Directors) in 2023 amounted to N803million (2022: N747million).

Acquisition of own shares

The Company did not acquire any of its shares during the year ended 31 December 2023 (2022: Nil).

Property, plant and equipment

Information relating to changes in property, plant and equipment is disclosed in Note 24 to the consolidated and separate financial statements.

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STERLING FINANCIAL HOLDINGS COMPANY PLC

Annual Report, Consolidated and Separate Financial Statements

For the year ended 31 December 2023

REPORT OF THE DIRECTORS - Continued

Employment and employees

Employment of disabled persons:

The Group has a non-discriminatory policy on recruitment. Applications would always be welcomed from suitably qualified disabled persons and are reviewed strictly on qualification. The Group's policy is that the highest qualified and most experienced persons are recruited for appropriate job levels irrespective of an applicant's state of origin, ethnicity, religion or physical condition.

Health, safety and welfare of employees:

Health and safety regulations are in force within the Group's premises and employees are aware of existing regulations. The Group provides subsidies to all levels of employees for medical expenses, transportation, housing, lunch, etc.

Employee training and development

The Group is committed to keeping employees fully informed as much as possible regarding the Group's performance and progress and seeking their opinion where practicable on matters which particularly affect them as employees.

Training is carried out at various levels through both in-house and external courses. Incentive schemes designed to encourage the involvement of employees in the Group's performance are implemented whenever appropriate.

Events after the reporting date

Note 37 to the consolidated and separate financial statements discloses no events after the reporting date, that could have a material effect on the consolidated and separate financial position of the Group and the Company as at 31 December 2023 or their profit for the year then ended.

Auditors

In accordance with Section 401(2) of the Companies and Allied Matters Act 2020 and Section 20.2 of Nigerian Code of Corporate Governance 2018, Messrs. Deloitte & Touche have indicated their willingness to continue as External Auditors of Sterling Financial Holdings Company Plc.

BY ORDER OF THE BOARD:

Temitayo Adegoke

Company Secretary

FRC/2018/PRO/NBA/002/00000018142

20 Marina, Lagos, Nigeria

22 March, 2024

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