Sterling Bank Positions For Expansion With New Structure

By Cami Ezenwa

Sterling Bank, soon to be known as Sterling Financial Holdings Company, is firmly positioned to expand her financial services footprint.

This new leap from traditional banking to delivering more value to shareholders, follows the unanimous support which the bank has received from her shareholders

Fillers from the Nigerian Exchange Limited (NGX), indicate that upon final ratification by the regulators, the commercial banking subsidiary of the holding company, Sterling Bank; will continue to operate with its current name as a limited liability company.

Also, its shares would be transferred from the publicly traded company to the newly formed Sterling Financial Holdings Company.

The Eagle reports that approval by the bank’s shareholders for the above was obtained at a recently held court-ordered meeting.

“Following the implementation of the scheme, shareholders will exchange their shares in the Bank for shares in HoldCo in the same proportion as their current holdings in the Bank, which will be a regulated entity for CBN purposes”, chairman of the bank’s board, Asue Ighodalo, said

He said several benefits would accrue to shareholders of the bank following the new development, listing these to include facilitating diversification into other permissible business lines.

It would also promote growth, enhance shareholder value and facilitation of a consolidated financial strength of the group, which would improve access and ability to raise capital, Ighodalo added

For the Chief Executive of Sterling Bank, Abubakar Suleiman, the advantages of the newly formed holding company include value creation to maximise earnings through new businesses, agility to optimise for opportunities and adapt to a rapidly changing market, maximise current and future talent potential with opportunities within the group and subsidiaries to nurture and engage its wealth of young and innovative talent.

The holding company also affords Sterling another opportunity to leverage its successful HEART strategy, which has seen the bank make consolidated investments in the Health, Education, Agriculture, Renewable Energy and Transportation sectors, growing the company’s year-on-year profits to record highs despite strong economic headwinds.

With the adoption of a Holdco structure, Sterling now possesses the latitude to make inroads into other sectors within financial services, such as pensions, asset management, payment services, real estate, and different verticals, along with the current banking licenses held by the commercial and non-interest banking subsidiaries, Sterling Bank and The Alternative Bank.

It would be recalled that the bank, has in the recent, has doubled down on digitisation with specialised products through the development and introduction of Specta, OneBank, I-invest, Gazelle and Omni X to fulfil the market’s needs for innovative retail and commercial banking solutions.

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A holding company, or Holdco, is a company set up for the purpose of making and managing, for its own account, equity investment in two or more companies, being its subsidiaries, engaged in the provision of financial services, one of which must be a bank.