The Chief Executive Officer of Sterling Bank Plc, Mr. Abubakar Suleiman has announced that the bank has obtained the Central Bank’s approval in principle to enable it restructure as a Holding Company.
The Bank’s desire to operate as a Holding Company was driven by its plan to spin off its Non-Interest Banking window which became operational in January 2014 into an autonomous entity.
A disclosure notice sent to the Nigerian Stock Exchange said the bank believes that the proposed structure incorporates efficiencies around operations and financing efforts that will support the individual businesses in reaching full potential.
A holding company is a corporation that owns a controlling interest in one or more banks. However, the Holdco does not itself offer banking services.
With regard to increased portfolio diversification, the bank said the Holding Company structure enables the Noninterest Bank and other non-core businesses achieve greater results based on focused management of the distinct businesses. Similarly, it said there will be improved efficiency resulting from the consolidation of key functions such as Compliance, Risk Management and other support functions, yielding improved prospects for individual business growth.
The move will also result in enhanced corporate governance which serves to promote a consistent culture across the group and quality of service to customers thereby facilitating sustainability of earnings.
There will also be better access to capital by leveraging the consolidated financial strength of the group which would have been otherwise difficult for each individual subsidiary company.
“Going into the Holding Company structure, our desire is to entrench our business model premised on impact capitalism where we believe that private sector capital and market-based tools will offer the best types of solutions to Nigeria’s most pressing social and environmental challenges,” the bank said.
“The Holding Company gives us the structure to explore our business model further.”
Details showed that the Holding Company is designed to operate on 3 major premises – Specialization, Partnership and Digitization.
The bank said the conventional bank will focus on building skills and using technology to provide solutions in the areas that are critical to development in the country, including health, education, agriculture, renewable Energy, and transportation (HEART).
“The Non-Interest Bank will focus on building partnerships that connect individuals and businesses leveraging technology to create business optimization while solving for an individual’s daily financial needs.
“The overall business will focus on social impact, corporate responsibility and the highest ethical standards in its dealings. Our Digitization drive will create an enabling environment for both financial institutions to grow while providing services and support to build efficiencies in different ecosystems.”
The bank said the execution of its plans is fully dependent on its interwoven operating model of agility, specialization and digitization. Essentially, for us to be successful, we require people who are adaptable and knowledgeable running processes that are simple, quick and tech-led to ensure efficiency”.
The bank said it is currently in the process of meeting the conditions for the final approval.