Sterling Bank to raise $200m Debt instrument Capital

Kindly Share This Story:

The Managing Director/Chief Executive of Sterling Bank Plc, Yemi Adeola,

From Benjamin A Ameh, Lagos

The blurring business outlook presents an opportunity for us to navigate our growth by innovative means.

The Managing Director/Chief Executive of Sterling Bank Plc, Yemi Adeola, on Thursday said however, our plan is to further strengthen our capital position with a subordinated multi-currency debt capital of US$200milliom (Tier-2) this year to boost the bank’s operations and deliver higher returns to stakeholders and shareholders in the coming year.

Speaking at the 53rd annual general meeting in Lagos, Adeola said full adoption of Bassel-2 requirements should be a drive-capital build-up and slower loan growth in the banking industry. More efficient management of and slower growth in government revenue will see greater competition for the private sector deposits leading to higher deposit rules.

The managing director pointed out that it is not a good decision to pay high dividends to shareholders from the small fund and then come back to the same shareholders to raise more money within the same year adding that bank retains more capital for the expansions.

Adeola further said that “When we did not need much capital we paid a dividend of 25 kobo per share in 2013 and when we needed capital, we reduced the dividend in 2014 and that this year, we will be raising $200 million seven year tier-2 debt instrument capital to enable us make more money for our shareholders.

Despite these pressures, we achieved double-digit earnings growth in line with our medium-term strategic objectives.”

In response to the performance of the bank for 2014 financial year, he said, it showed the strengths of its resilient growth model and ability to continue to deliver value for all stakeholders. 2014 was a difficult year for the banking industry following multiple challenges arising from a weaker macroeconomic environment and various regulatory policies that impacted on the margins of banks, the Sterling bank added.

The bank ended year with gross earnings of N103.7 billion to N91.6 billion recorded in 2013, showed an increase of 13 per cent. Profit before tax rose by 15.4 per cent to N10.7 billion against N7.5 billion in the preceding period of 2013. While, Net interest income jumped up by 20.1 per cent to N43.0 billion in contrast with N35.8 billion recorded in 2013. Also, Net loans and advances increased by 15.4 per cent to N371.2 billion as against N321.7 billion in 2013.

Customer deposits rose by 15 per cent to N655.9 billion against N570.5 billion posted in the comparative period of 2013.

Include shareholders’ funds increased by 33.5 per cent to N84.7 billion from N63.5 billion in 2013.

Its total assets stood at N824.5 billion compared with N707.8 billion, representing an increase of 16.5 per cent.

However, the bank’s cost of funds took another direction, dropped to 5.3 per cent from 6.1 per cent declared in 2013.

The managing director reassured the stakeholders and shareholders that the bank would continue to deliver better values given the steadiness of its strategic growth plan and its current strong balance sheet position.

Meanwhile, the event venue became a harvesting of complains  from major shareholders groups saying we are not happy with the central bank of Nigeria policy of keeping our money without yield interest adding that the same central bank and its allied penalizes bank without consider investors of the bank.

The major complaints about are CBN, AMCON and FRC with different as amended rules and regulations laws to siphoned their sweat money without regarding them, the shareholders as it affect the bottom line of the bank. The bank cannot pay out of what they did not have, they noted.

 


Kindly Share This Story:

Related Post

Leave a Reply

Your email address will not be published. Required fields are marked *

amehnews greetings

x
%d bloggers like this: