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Financial Services

Sterling Bank gets CBN approval for restructuring

Sterling Bank has obtained the CBN’s approval in principle to enable it restructure as a Holding Company.

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Sterling Bank, Sterling Bank: Impressive growth in profit despite elevated OPEX, Sterling Bank gets CBN approval for restructuring

Sterling Bank has announced its approval from the Central Bank of Nigeria, to enable it to restructure as a holding company, sequel to its plan to spin off its Non-Interest Banking window. Recall that the Non-Interest Banking window of the bank became operational in January 2014.

In a press release signed by the Bank’s secretary, Temitayo Adegoke and sent to the Nigerian Stock Exchange, the bank believes that the proposed structure embodies efficiency around operations and financing efforts, that will support individual businesses in reaching full potential through increased portfolio diversification, enhanced corporate governance, and better access to capital, leveraging the financial strength of the group.

Commenting on the proposed holding structure of the bank, a part of the press release read thus, “Going into the Holding Company structure, our desire is to entrench our business model premised on social capitalism, where we believe that private sector capital and market-based tools will offer the best types of solutions to Nigeria’s most pressing social and environmental challenges. The Holding Company gives us the structure to explore our business model further. Partnership Technology Specialization. The Holding Company is designed to operate on 3 major premises – Specialization, Partnership, and Digitization. The Conventional Bank will focus on building skills and using technology to provide solutions in the areas that are critical to development in the country – Health, Education, Agriculture, Renewable Energy, Transportation (HEART). The Non-Interest Bank will focus on building partnerships that connect individuals and businesses, leveraging technology to create business optimization while solving for an individual’s daily financial needs.’’

Recall that Sterling Bank had earlier reported mixed results in terms of key indicators for H1, 2020. While its Net trading income increased from N717 million to N3 billion, its Interest expenses declined to N12.5 billion. These positives were eroded by a sharp decline in its profit, from N5.7 billion recorded in mid-2019 to N5.4 billion in the corresponding period of 2020.

In light of the aforementioned key indicators; the proposed holding structure, therefore, presents an opportunity for the bank to diversify and increase its income stream, ensuring liquidity through the process.

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Chidi Emenike is a graduate of economics, a Young African Leadership Initiative Fellow and an Investment Foundations certificate holder. He worked as a graduate Teaching Assistant in the Federal College of Education Kano and is also a trained National Peer Group Educator on Financial Inclusion

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Corporate deals

Access Bank moves to acquire BancABC Botswana

The Nigerian bank would buy just over 78% of BancABC Botswana for an undisclosed cash amount of about 1.13 times the book value plus a two-year deferred payment.

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Access Bank , #EndSARS: Access Bank Debunks aiding military onslaught against Lekki protesters

According to a memo published today, Access Bank, Nigeria’s largest lender, has agreed to buy a majority stake in African Banking Corporation of Botswana for cash, only a month after buying a South African bank.

Stagflation and dollar shortages in Nigeria have frustrated industries and shrunk the lending sector, prompting Access Bank to extend across the African continent. Atlas Mara said in a statement on Monday that the Nigerian bank would buy just over 78% of BancABC Botswana for an undisclosed cash amount of about 1.13 times the book value plus a two-year deferred payment.

Access Bank now has a presence in ten African countries thanks to the agreement with ABC Holdings, a local subsidiary of Atlas Mara, a London-listed company. It should be completed by the end of the second quarter.

Herbert Wigwe, the Chief Executive Officer of Access Group, told the public that the company is focused on growth. “We remain committed to a focused and deliberate expansion strategy in Africa, which we believe will generate solid, long-term returns,” the bank said.

According to Access Bank, BancABC is Botswana’s fifth-largest bank, with a strong retail loan portfolio and plans to expand into corporate and small-to-medium-sized business lending. Nigerian lenders have been looking for new ways to increase profits in the face of slowing domestic inflation, falling government bond yields, and an increase in restructured loans as a result of the COVID-19 pandemic.

In March, Access Bank paid $60 million for a majority stake in South Africa’s Grobank, making it the first Nigerian bank to enter the country. It has also recently signed agreements in Zambia and Mozambique. Access Bank is restructuring into a holding firm to drive its international growth with more than $16 billion in reserves and an emphasis on corporate and retail banking.

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Business News

How API fintech startups are driving access to financial data across Africa – CEO, Mono

In an interview with Abdulhamid Hassan, CEO of Mono HQ, a fast-rising API fintech startup, we got to understand how their services are beneficial.

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In recent times, we have seen APIs grow from just a curious term among tech enthusiasts to become a core to many businesses. API’s have been highly valuable to developers and businesses because it acts as a communication channel between two services.

In Nigeria, API fintech startups have made a tremendous impact in the fintech space with the rise of API startups like Mono, Okra, and Onepipe that are building Africa’s API infrastructure for institutions and third-party companies for different purposes. These startups have garnered investors in a very short period of operation.

Why API startups?

An API makes it easier to integrate applications and services as it facilitates communication between them. APIs allow businesses to create ecosystems around their operations. Today, they are responsible for connecting people and systems thereby enabling the creation of a better user experience by simplifying access to information.

For example, instead of building its own mapping and payment services, Uber was able to leverage public APIs like Google Maps and a payment gateway and then deliver them in a mobile application that ended up changing the entire transportation industry across the globe.

Why open banking is important

Open banking is a banking practice that provides third-party financial service providers open access to consumer banking, transactions, and other financial data from banks and non-bank financial institutions through the use of application programming interfaces (APIs).

Since fintech startups are fundamentally focused on providing financial solutions, they need access to financial data to continually create new solutions and also prove their value to prospective users. Open Banking provides the opportunity in the form of convenient access to financial data and services for them to scale up their customer base and products.

However, open banking also poses security threats such as data breaches due to poor security, the potential for a malicious third-party app to clean out a customer’s account, or insider threats from financial institutions that have become relatively widespread as more data becomes interconnected.

In an interview with Abdulhamid Hassan, CEO of Mono HQ, a fast-rising API fintech startup, we got to understand what they do and how their services are beneficial.

What was the inspiration for founding your startup?

The inspiration behind founding Mono came in a conversation between myself and Prakhar. We had just realized how difficult it was to find a service that could put all our financial accounts in one place so we could see them at the same time. There’s nothing quite like relating directly to a problem because it means you have first-hand knowledge of the difficulty it presents. We decided to build an app that could power account linking, and that’s how we walked into founding Mono.

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What does Mono do and what sets you apart from other fintech startups?

Mono builds APIs and infrastructure that makes it easy for developers and businesses to create better experiences for their users. Our APIs act as a conduit to enable these businesses to access data and financial accounts. We don’t think of ourselves as a fintech startup, we’re more a data company that makes innovation possible. Today, it’s mostly fintech companies that we support with our user identity/account verification, statement collection, and direct debit services. Tomorrow, it could be Edtech or health tech.

What problems are you trying to solve in Nigeria and Africa?

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Today, in Nigeria, there are lots of companies with products that require their customers’ financial data to function. Banks don’t have public APIs for businesses and developers to consume. Without this information, services that provide value to customers cannot be delivered optimally. But now, through our APIs, people are able to securely link their financial accounts, share their bank data like statements, transactions, and balances in seconds with other businesses.

Businesses are also able to verify the identity and account information of their users and more. With this infrastructure and these insights, businesses can provide better services and experiences for their customers, mitigate identity fraud, and even create new products off the back of these possibilities.

So, we’re solving the problem of inaccessibility to data and financial accounts, and enabling businesses to innovate and build for their customers.

Do you believe Nigeria is truly ready to adopt an open banking system?

We believe that while Open Banking is a fairly new financial practice in Nigeria, its adoption is spreading rapidly. This innovation can grow to make the adoption necessary, rather than something the financial system in the country has to be ready for.

What would be the role of API companies such as yourself in encouraging open banking in Nigeria?

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Apart from powering more businesses in the African ecosystem to create endless possibilities and personalized experiences for the everyday user, our role is also to be an example of upheld data and privacy ethics.

What are your plans for expanding into other African markets?

Mono started out in Nigeria, but our mission is to power the internet economy in Africa. Our expansion plans see us moving into Ghana and Kenya, first to understand each market and the ways that Mono’s services can solve their problems, and then establish ourselves there.

Bottom line

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Since APIs are an effective way to enable the digital transformation of businesses, the ability for businesses to innovate and become early adopters of API services is the key to success and this will allow companies to move into new markets that they may never have considered.

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