Sterling Financial Holding Company Plc has shown impressive growth in recent years.

In 2024, the bank achieved a 102% year-on-year increase in profit, rising to N43.675 billion, primarily driven by strong topline performance.

The momentum carried into 2025. Profit after tax for the first nine months surged 127% YoY to N62.297 billion, compared to N27.446 billion in 9M 2024, and is already 43% higher than the entire 2024 full-year result.

Ahead of the results, Sterling had released its Q4 2025 forecast, targeting an additional N20.696 billion profit. Combined, the bank expects to close the year with N82.994 billion, a striking 90% increase over 2024.

But the real question is whether Sterling can sustain this pace in Q4. The bank must not only hit the N20.696 billion target, but it must also beat it. The reason is simple: while profit is rising sharply, earnings per share are no

Despite a 127% profit surge, EPS rose only 35% YoY to N1.28, about 99% of the 2024 EPS. This slowdown has little to do with weak performance and everything to do with dilution.

In September 2025, the bank closed a public offer to raise N87.067 billion, issuing 12.581 billion new shares at N7.00 each. If fully allotted, outstanding shares will rise further to 64.698 billion.

At that level, a full-year net profit of N82.994 billion translates to an EPS of N1.28 the same as the 9M 2025 EPS, and 0.78% lower than the N1.29 posted in 2024.

This means that for Sterling to maintain bottom-line strength per share, not just in absolute profit, the bank cannot merely deliver its Q4 forecast. It must outperform it.

Sterling’s challenge for 2025 is no longer just about hitting N83 billion. It is about earning enough to offset dilution and preserve shareholder value.

The truth is that N83 billion sounds impressive, but the numbers tell a more complicated story.

Here is the reality:

This means that despite 90% profit growth, Sterling’s EPS will drop from N1.85 (TTM) to N1.60, a decline of 13.5%.

The profit cake is larger, but it is now shared among far more shareholders.

This matters because investors value banks on earnings per share, not just profit size. Sterling currently trades at N7.40, implying a P/E ratio of 4.03, already higher than the sector average of 2.82.

If EPS ends the year at N1.60, the forward P/E rises to about 4.63, holding current share price constant.

That widens the gap between Sterling and its peers even further, making the stock look expensive relative to the sector.

If the market decides to price Sterling in line with the sector’s P/E ratio, the fair value could fall to N4.51 per share

This is still materially below the current price and highlights the need to grow EPS, not just profit.

Sterling’s Q3 2025 performance offers a crucial signal for investors.

The bank delivered N20.522 billion in Q3 profit, surpassing its forecast of N18.257 billion by 12.41%.

This stronger-than-expected result is an indication that Sterling can close the EPS gap created by its expanded share base.

If Q4 also comes in above expectations, the full-year EPS could push above N1.60, strengthening its forward P/E, improving investor sentiment, and supporting valuation stability.

Sterling’s strong profit growth in 2025 comes with underlying pressures that could shape how the year ends.

With more shares coming into play, Sterling must tighten cost discipline if it wants profit growth to translate into meaningful earnings per share.