6.2 C
London
Friday, December 2, 2022

Sterling Bank Shareholders Approve Name Change, Restructuring

The board of Sterling Bank Plc announced on Monday that the company will adopt a new name after receiving shareholder approval to transition from a core banking operation to a holding company.

This, according to the stakeholders, will allow it to pursue opportunities to acquire controlling interests in businesses in which it currently has a significant stake.

The declaration comes one week after the bank was required by a judge to call a shareholders’ meeting as one of the final crucial steps in the corporate reorganization.

When the change is implemented, the lender will be known as Sterling Financial Holdings Company, according to a regulatory file seen on the website of the Nigerian Exchange Limited.

Adopting a holdco structure gives Sterling Bank the leverage to expand into financial services areas other than commercial banking, which is currently prohibited under its present license and that of many lenders in Nigeria.

These industries, which include pensions, asset management, payments, and fintech, are gaining popularity among banks and offer opportunities for diversification as competition for interest income, which makes up the majority of the banking sector’s revenue, heats up.

One of the first companies to use the holdco structure, Stanbic IBTC Holdings, provides proof that the strategy is effective.

As the market leader in the Nigerian pension sector, its pension unit manages almost one-third of the N14.2 trillion in assets.

With the key resolutions for the scheme of arrangement now approved, the transition will proceed to its final phase where regulators including the Central Bank of Nigeria are to sanction the new entity into existence.

“The bank will transfer all the assets, liabilities and undertakings related to the non-interest banking business to The Alternative Bank Limited,” the statement said in reference to its newest subsidiary that received an approval-in-principle in December.

Sterling Bank’s issued and paid-up share capital valued at 28.8 billion outstanding shares will passé to the holding company in exchange for the allotment of those same units to shareholders on completion.

Latest news
Related news