Sterling Bank Plc on Wednesday got the approval of its shareholders to increase the bank’s share capital from N12bn to N16bn with the creation of additional eight billion ordinary shares of 50 kobo each.

The shareholders also approved the payment of a dividend of 25 kobo for every share of 50 kobo for the 2013 financial year.

The shareholders gave the approvals at the bank’s Annual General Meeting, which was held in Lagos.

The Managing Director and Chief Executive Officer, Sterling Bank, Mr. Yemi Adeola, explained that the capital raising exercise was something the bank conceived years back.

He said, “Capital raising exercise was premeditated as far back as two years ago. We set out to raise $400 divided into three classes. Class A is the rights issue, which was successful, in December last year. Stage B is the private placement of about N18bn and we are on it right now. And the third one is the tier 2 capitals.”

He explained that when raised, about $30m would go into delivery channels – branches, automated teller machines, point-of-sale terminals, etc.

“Another chunk of it – about $40m-$50m will go toward technology and the rest will be working capital to enable us to lend to our customers and do more business,” he added.

Responding to a call by a shareholder for the bank to take a leading position in the implementation of the Central Bank of Nigeria’s cash-less policy, Adeola said that the bank had plans to activate 5,000 PoS terminals and install 700 new ATMs in 2014. This, he said, was part of the efforts by the bank to better serve its customers.

In giving the approvals to proposals by the board, the shareholders commended the bank for the growth recorded in the 2013 financial year and for the continued annual increase in the dividend paid.

In the period, the bank’s gross earnings rose by 33 per cent to N91.629bn; profit before tax was up by 24 per cent to N9.310bn; and profit after tax appreciated by 19 per cent to N8.275bn.

The National Coordinator, Independent Shareholders Association of Nigeria, Mr. Sunny Nwosu, stressed the need for the bank to raise more capital, saying, “If our capital base is not robust, we will not be able to do big business.”

He, however, advised that in raising the capital, the bank should not opt for a convertible debenture as there was the need to improve on the dividend paid in the future.

The Chairman, Sterling Bank, Alhaji Sulaiman Adebola, who is to retire along with three non-executive directors of the bank before the end of the year, assured the shareholders that the bank had been positioned for sustained growth.

He said, “With the injection of new but experienced non-executive directors, I remain confident that our bank is well-positioned to continue to offer competitive returns to its shareholders on a sustained basis.”

Adebola was  commended for transforming the bank from an institution incapable of paying dividends to one which had sustained the trend for years and achieved steady growth.

Source: Punch (Simon Ejembi)