In a bid to ensure a better performance in 2018, Nigeria’s tier 2 bank, Sterling Bank Plc, has announced its mid-term goal plans while assuring its shareholders and the investing public of its determination to ensure growth.
The company’s recently appointed Managing Director, Abubaker Suleiman disclosed said plan while speaking at Sterling Bank’s Facts Behind the Figures session at the Nigerian Stock Exchange in Lagos. According to him, the bank has a mid-term strategy (2017-2021) to do the following;
- Grow its market share deposits by five percent (5%)
- Diversify its retail funding base
- Reduce its non-performing loans and
- Increase Return on Average Equity (ROAE) above average
The bank is hopeful that all these moves will eventually help to position it as a global financial institution. In the meantime, it will keep operating by its “sustainable business model”.
In the same vein, the bank will also remain committed to ensuring financial intermediation by intervening in sectors with potentials to create jobs, and by so doing improving the overall economic growth of Nigeria. He identified the company’s focus areas to include agriculture, renewable energy, education, and health, etc.
Can the bank’s action speak louder than its words?
It should be noted this is not the first time Sterling Bank has come up with such ambitious plans. In an investor presentation released for its third quarter of 2017 results, the company had stated that it was on track to raise about ₦35 billion in tier 2 capital.
This is in line with its competitors such as Diamond, Union, FCMB, Unity and Stanbic IBTC banks all of whom have unveiled/pursued various strategies to boost their capital bases. Take for instance, while Diamond has sold non-essential subsidiaries, Union bank raised N50 billion through a rights issue and is considering raising more funds through a Eurobond.
FCMB is also reportedly considering a Eurobond. Unity bank was in talks with Milost Global, a private equity, firm for a potential take-over, though this has since fallen through. Stanbic IBTC has recovered well since it survived its debacle with the FRCN and has been one of the better performers thethr stock exchange baking index.
In order to effectively compete and ensure that its goal plans are actualized, therefore, Sterling Bank must ensure to become more proactive. Sterling Bank has a new young management, led by Abubakar Suleiman and words on the street suggest the bank is restructuring and refocusing on core banking services such as lending to SME’s and companies that will lead Nigeria’s quest for industrialization.
Sterling Bank Plc was incorporated in 1960. It is one of Nigeria’s tier 2 banks. As we reported, the bank recorded a gross earning of ₦133.4 billion in 2017 with a profit after tax of ₦8.5 billion. Its shares were traded at ₦1.65 during the NSE session ended May 9th, 2018.