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, Mr. 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.
He however emphasised that despite the tough operating environment Sterling Bank was still committed to meeting its expansion targets.
Abubakar Suleiman dismissed suggestions by analysts in some quarters that the Bank would not be able to achieve its capital raising targets this year due to regulatory headwinds, recalling that such skepticisms were similarly expressed in 2013 when the bank announced that it plans to raise additional capital via equity issues.
He said, “They raised doubts in 2013; they raised doubts in 2014. But what happened? We were successful in our capital raising. Their doubts are welcome; it will spur us to work harder and ensure that we achieve our target. But we are confident we will do it. But of course, until it is done, you cannot say you have succeeded. But we know that we will do it.”
The bank’s Managing Director/Chief Executive Officer, Mr. YemiAdeola, had told journalists last December that the bank would raise capital this year, because according to him, “Capital is the tool of banking; banks have to continue to raise capital.”
Sterling Bank’s first quarter results for 2015 show that it recorded a Profit After Tax(PAT) of N3.9 billion for the period, an increase of 25 per cent from the N3.1 billion recorded in the corresponding period of 2014. Profit Before Tax (PBT) also rose by 14.1 per cent from the N3.5 billion recorded in the same period last year to N4.0 billion, while non-interest income grew by 31.9 per cent from N6.1 billion to N8 billion.