Shareholders of Sterling Bank Plc on Wednesday approved the bank’s plans to raise new capital through a private placement.
The private placement when concluded will shore up Sterling Bank’s share capital to N16 billion from the existing N12 billion.
The shareholders gave the approval at the bank’s 52nd Annual General Meeting (AGM) held in Lagos.
According to the shareholders, the private placement should be raised by the creation of an additional eight billion ordinary shares of 50k each.
The shareholders also approved the payment of 25k dividend per share declared by the bank.
Speaking at the meeting, Dr Farouk Umar, President, Association for the Advancement of the Rights of Nigerian Shareholders, said that the shareholders would support the capital raising exercise.
Umar said that the bank needed to increase its share capital to finance value creation projects.
He also said that enhanced shareholders’ funds would increase the bank’s lending limits.
Mr Sunny Nwosu, National Coordinator, Independent Shareholders Association of Nigeria (ISAN), said that the capital exercise would improve the bank’s return on investment.
Nwosu said that the bank would not be able to finance big business with a small capital base.
“If our capital base is not robust, we will not be able to finance big businesses.
“ISAN support for the bank’s robust financial muscle stems also from the need for Sterling Bank to be repositioned toward benefiting from the anticipated business of government’s transformation agenda,” Nwosu said.
Another shareholder, Mr Balogun Okelana, called on the bank to improve on its cashless policy through deployment of more Point Of Sales (POS) terminals across the country.
Okelana said that the Central Bank of Nigeria (CBN’s) stringent laws and regulations had affected the growth of the banking sector.
He said that CBN laws and regulations “are killing banks and businesses in the country.”
Mr Yemi Adeola, the bank’s Managing Director, said that they would continue to emphasise sustainable growth across all market segments by deepening social and environmental interactions.
Adeola said that the bank would increase investments to grow its retail funding base and service delivery across all channels.
He said that the bank would deploy 5000 POS and 700 Automated Teller Machines in 2014, to enhance service delivery.
The bank posted gross earnings of N91.63 billion for the financial year ended Dec. 31, 2013 against N68.86 billion achieved in 2012.
Its profit after tax stood at N8.28 billion, compared with N6.95 billion posted in the comparative period of 2012, an increase of 19 per cent.