In advancing financial opportunities and move to broaden the business horizons of One of the major commercial banks in the country, Sterling Bank Plc may likely restructures and might change to a new name, after receiving shareholders approval to convert from a core banking business to a holding company, according to its board yesterday.
The bank has to brace-up for the opportunity to gain majority stakes in the companies in which it currently has a substantial stake.
The announcement came, a week after the bank called a court-ordered shareholders’ meeting as part of the final key stages of corporate reforms.
The lender will be known as Sterling Financial Holdings Company, when the transition takes place, according to a regulatory filing sighted at the Nigerian Exchange Limited website.
Adopting a retention structure gives Sterling Bank the advantage to enter other sectors within financial services, besides commercial banking, that its current license and those of many lenders in Nigeria do not allow.
These sectors, which include pension; asset management; payments and fintech are gaining appeal among banks and providing scope for diversification, as competition for interest income, which accounts for the bulk of banking industry revenue, becomes increasingly fierce.
Stanbic IBTC Holdings, an early adopter of the holdco structure is a testament that the holdco structure is a model that works. Its pension unit controls around a third of the N14.2 trillion assets under management as market leader of the Nigerian pension industry.
With the key resolutions for the arrangement scheme now approved, the transition will proceed to its final phase in which regulators, including the Central Bank of Nigeria, CBN, will sanction the existence of the new entity.
“The bank will transfer all assets, liabilities and commitments related to the interest-free banking business to The Alternative Bank Limited,” the statement said, referring to its new subsidiary, which received approval in principle in December.
Sterling Bank’s issued and paid up share capital valued at 28.8 billion shares outstanding will pass to the holding company in return for the allocation of those same units to shareholders upon completion.
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