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Barring any unforeseen circumstances, Sterling Bank Plc is expected to raise $200 million in tier two capital next year just as it is targeting N90 billion by the close of 2014.
This was disclosed by its Managing Director/Chief Executive Officer, Mr. Yemi Adeola, on the sidelines of the bank’s Extra-Ordinary General Meeting (EGM) in Lagos.
According to him, the bank’s capital presently stands at N60 billion, but that if the N20 billion currently being raised in private placement is added, the bank’s capital would rise to N80 billion. He explained that by the time the bank ploughs back the profit will be making this year, it would end the year with about N90 billion in capital.
His words: “We raised N12 billion through rights issue and we are currently raising N20 billion in private placement, totaling N32 billion, thereafter, we will do tier 2 of another $200 million, which is likely to be done by first quarter next year. Our view today is that we must be efficient, we must deliver returns to shareholders, it doesn’t matter how big you are, you can be big for nothing. But overall, it makes sense to have a strategic plan in sight, and our strategic plan is that in another five years, we will be among the top five Nigerian banks in terms of size. But in terms of profitability, we will continue to be top five even from now in terms of return on equity and return to our shareholders,”
As part of special resolutions passed at the EGM, the bank’s shareholders agreed “that subject to regulatory approvals, the Directors be and are hereby authorised to issue up to 7,471,698,113 ordinary shares of 50 kobo each from the company’s share capital by way of special/private placing to Messrs. Silverlake Investments Limited or such other identified strategic investor at a price of N2.65 per share or such other price as the directors may determine in the interest of the company and subject to other terms and conditions and at such times as the directors may deem fit, and in respect thereof, the directors be and are hereby further authorised to appoint such advisers, professionals and parties that they deem necessary, upon such terms and conditions that the directors may deem appropriate”
They also approved “that without derogation from the above, additional capital up to US$200 million or its equivalent in Naira be raised through any or a combination of the following: equity, global depository receipts, quasi equity, convertible loans, medium term notes, bonds and any other debt instrument (s), whether secured or unsecured, senior or subordinated by way of a public offering, rights issue, private placement either as a standalone transaction or by way of a programme, in such tranches, series or proportions, at such coupon or interest rates, within such maturity periods, at such dates and time subject to such terms and conditions, including through a book building process or other process(es) all of which shall be as the Directors may deem fit and subject to the approval of the regulatory authorities.”