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Sterling Bank Targets N200bn Fresh Capital Ahead Of CBN’s Recapitalisation Deadline

Sterling Financial Holdings Company Plc is seeking the approval of its shareholders to raise N200bn fresh capital for its banking subsidiary through share issuance to the public and right issue to existing shareholders.

The company will also increase its share capital by allotting up to 40,000,000,000 shares of 50 Kobo.

“Company be and is hereby authorized to raise additional capital of up to N200,000,000,000 through the issuance of Public shares in the Nigerian capital market by way of rights issues, private placements, public offerings, private and/or other transaction modes, at a price(s), coupon or interest rates determined through book building or any other acceptable valuation method or combination of methods… subject to obtaining the requisite approvals of the relevant regulatory authorities,” the company said on Thursday.

The decision of the board would assist the bank in meeting the new capital requirement set by the Central Banks of Nigeria (CBN).

Triggered by prevailing macroeconomic challenges, the apex raised the international bank capital requirement to N500bn; banks with national licenses N200bn while regional commercial banks N50bn.

The capital requirements of merchant banks and non-interest banks with national licenses were raised to N50bn and N20bn respectively while the capital of non-interest banks with regional licenses was raised to N10bn.

The exercise began April 1, 2024, and would end by March 31, 2026.

The central bank said it wants banks to meet the new capital requirement through private placements, rights issues, mergers acquisitions and upgrades or downgrades of licenses.

Sterling Bank said, “In the event of a rights issue, any shares not taken up by existing shareholders within the period stipulated under the rights issue may be offered for sale to other interested existing shareholders and where following such offer, any portion of the shares, remain unsubscribed, the directors are hereby authorized to offer such shares to interested investors on similar terms to the Right Issue or offer for subscription.”

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