At its Extra-Ordinary General Meeting held in Lagos on February 4, 2011, Sterling Bank received shareholders’ approval to apply for a national commercial banking license under the new geographic footprint categorization of the Central Bank of Nigeria. The Bank had sought shareholders’ approval to apply “for a commercial banking license on a national basis”.
Under guidelines issued by the banking regulator in September 2010, Nigerian banks are required to exchange their universal banking licenses for fresh permits that are classified according to international, national and regional coverage. National banks, which may operate in all states of the Nigerian federation, must maintain a minimum paid-up share capital of N25 billion.
Addressing the shareholders, Yemi Adeola, the Group Managing Director, gave the assurance that Sterling Bank “has what it takes to operate efficiently, competitively and profitably as a national bank.”
“The new CBN rules have leveled the playing field by allowing each financial institution to choose its patch in the turf that is best suited to its unique value proposition for customers and shareholders. For Sterling Bank with 95 branch locations in 26 states, it is natural for us to retain our spread while penetrating deeper to serve over teeming customers across every household income and firm revenue slice,” he said.
The Bank also got approval to raise up to N10 billion or its equivalent in foreign exchange in a non-equity issue, which would not dilute the holding of shareholders. Sterling Bank has received confirmed interest from CardinalStone Partners Limited, a full service investment bank, to make the investment at a coupon rate ranging from 10% to 13% for a minimum tenor of seven years.
Speaking of the expected capital injection, Adeola explained that it would be used to enhance working capital and finance growth. He also expressed his satisfaction with the choice of the investor which he described as a ‘top-tier principal investor with a deep bench of senior level talent in the financial services sector both at the executive and board levels.’
On his part, Femi Ogunjimi, the Chief Executive Officer of CardinalStone Partners, said it was a privilege to ‘be part of Sterling Bank’s growth story at this exciting point in time.’