Sterling Bank to raise $150m fresh capital
STERLING Bank has said it plans to raise between $100million (N20billion) and $150millon (N30biilion) in Tier 2 capital this year to fund its expansion plans.
The Bank’s Chief Financial Officer (CFO)/Executive Director, Abubakar Suleiman, disclosed this at an interactive session with Business Editors in Lagos recently.
He explained that the Bank was on track on its expansion targets, which it unveiled in 2013 and would soon embark on another phase of its growth strategy.
According to him, the bank currently has 1.5 million customers and has been able to achieve over three per cent market share from 1 per cent a few years ago.
He revealed that from 84 branches in 2006, the lender’s branch network should hit the 200 mark by the end of the year adding that it would increase the number of its Automated Teller Machines (ATMs) to 1000 by the end of this year.
He also stated that the bank will soon deploy a new core banking application which would significantly boost the quality of its operations and service delivery
The Executive Director said that the bank’s goal was to be among the top five lenders in the industry not in terms of balance sheet size but in the areas of quality service delivery and compliance to regulations.
He pointed out that there were banks with much bigger balance sheets, which were not meeting customers’ expectations in key areas, stressing that as Sterling Bank expands and becomes a bigger financial institution, it will continue to outperform its peer group.
As he put it, “We have consistently outperformed our peer group and we will outperform the next group. We want to be there when it comes to service delivery, in terms of compliance to regulations and how we are perceived as good corporate citizens.”
He disclosed that the lender would raise between $100million (N20billion) and $150millon (N30biilion) in Tier 2 capital this year to fund its expansion plans.
The CFO noted that regulatory headwinds, especially the hike in Cash Reserve Requirements (CRR) on public sector deposits had impacted banks’ profitability and restricted their lending capacity to finance economic growth.
He argued that the amount of bank deposits that the CBN had sterilized as a result of the 75 per cent CRR on public sector deposits and 20 percent CRR on private sector deposit was “unprecedented” and had constrained banks’ capacity to lend.
He pointed out that the deposit with the CBN were non-earning adding that not only does this impact banks’ bottom line but it also prevents lenders from funding businesses.