Following plans to spin off its Non-Interest Banking window, Sterling Bank has announced its approval from the Central Bank of Nigeria, to enable it to restructure as a holding company.
It is worthy to note that the Non-Interest Banking window of Sterling Bank became operational in January 2014.
According to a press release signed by the Bank’s secretary, Temitayo Adegoke, and sent to the Nigerian Stock Exchange, the bank believes that the proposed structure embodies efficiency around operations and financing efforts, that will support individual businesses in reaching full potential through increased portfolio diversification, enhanced corporate governance, and better access to capital, leveraging the financial strength of the group.
The press release read in part:
“Going into the Holding Company structure, our desire is to entrench our business model premised on social 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 Holding Company gives us the structure to explore our business model further. Partnership Technology Specialization. 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.’’
Sterling Bank had earlier reported mixed key indicators results for H1, 2020.
The bank’s net trading income increased from N717 million to N3 billion, while its Interest expenses declined to N12.5 billion.
These positives were then clouded by a sharp decline in its profit, from N5.7 billion recorded in mid-2019 to N5.4 billion in the corresponding period of 2020.
It is believed that the proposed holding structure will present an opportunity for Sterling Bank to diversify and increase its income stream, ensuring liquidity through the process.