Sterling Bank Plc will take a new name after receiving shareholders’ approval to convert from a core banking business to a holding company, its board said on Monday, setting it up for the opportunity to gain controlling stake in companies where it currently holds substantial interest.
The bank will be known as Sterling Financial Holdings Company when the transition is delivered, according to a regulatory filing posted on the Nigerian Exchange Limited’s website.
The announcement comes one week after the bank convened a meeting of shareholders at the order of a court as part of the last key stages of the corporate reformation.
A holdco structure confers on Sterling Bank the leverage to make in-roads into other sectors within financial services apart from commercial banking which its current licence and those of many lenders in Nigeria do not allow.
Such sectors, comprising pension; asset management; payments and fintech, are gaining appeal among banks and provide chances for diversification as competition for interest income, which accounts for the bulk of the revenue of the banking industry turns increasingly fierce.
Stanbic IBTC Holdings, one of the early birds that adopted the holdco structure, is a testament that the holdco structure is a model that works. Its pension unit controls around one third of the N14.2 trillion assets under management as the market leader of the Nigerian pension industry.
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.