In a corporate release earlier today, Sterling Bank Plc announced that it will restructure as Holding Company. The CEO, Mr. Abubakar Suleiman stated that the Bank has obtained the Central Bank’s approval.
He said that the Bank’s desire to operate as a Holding Company was driven by its plan to spin off its non-interest banking window. The non-interest banking window became operational in January 2014.
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The Bank believes that the proposed structure will improve efficiency around operations and financing efforts that will support the individual businesses in reaching full potential through:
- Increased portfolio diversification – The Holding Company structure enables the Non-Interest Bank and other non-core businesses achieve greater results based on focused management of the distinct businesses.
- 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.
- Enhanced Corporate Governance which serves to promote a consistent culture across the group and quality of service to customers thereby facilitating sustainability of earnings.
- Better access to capital by leveraging the consolidated financial strength of the group which would have been otherwise difficult for each individual subsidiary company.
The Holding Company is designed to operate on 3 major premises – Specialization, Partnership and Digitization.
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 – Health, Education, Agriculture, Renewable Energy, 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 religious compliance in its dealings.
Its 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 corporate release stated that the Bank is currently in the process of meeting the conditions for the final approval.
If successful, it will join FBN Holdings Plc and FCMB Group, as financial institutions listed on the NSE with a holding company structure.