Sterling Bank Plc says it is planning to raise between $100m (N20bn) and $150m (N30bn) in Tier 2 capital this year to fund its expansion plans.
The Chief Financial Officer, Sterling Bank, Mr. Abubakar Suleiman, who disclosed this at an interactive session with journalists in Lagos, said the move was in line with the expansion targets the lender had unveiled in 2013.
He noted that regulatory headwinds, especially the hike in Cash Reserve Requirements on public sector deposits, had impacted banks’ profitability and restricted their lending capacity to finance economic growth.
The amount of bank deposits that the CBN had sterilised as a result of the 75 per cent CRR on public sector deposits and 20 per cent CRR on private sector deposit, according to Suleiman, is “unprecedented.”
This, he said, had constrained banks’ capacity to lend, noting that the deposit with the CBN was non-earning and would impact on banks’ bottom lines.
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The executive director, however, emphasised that despite the tough operating environment, the lender was still committed to meeting its expansion targets.
Sterling Banks raised about N19.8billion in Tier 1 capital last year via a private placement.