Sterling Bank received approval from the Central Bank of Nigeria (CBN) to convert to a holding company, subject to certain conditions outlined by the regulator.
It also received preliminary approval for a permit to establish a non-interest banking unit called Alternative Bank Limited, the lender said.
The financial services group that will emerge from Sterling Bank and its subsidiaries will own controlling stakes in them, while overseeing management decisions without direct involvement in their day-to-day operations, thanks to the holdco structure.
The model protects against exposure risk by making the parent company not liable for the losses of any of the subsidiaries in the event of bankruptcy.
READ ALSO: Sterling Bank Post N2.4 Billion Profit for First Three Months of 2021
“The Alternative Bank Limited will focus on developing partnerships that connect individuals and businesses, leveraging technology to create business optimization while meeting an individual’s daily financial needs,” according to the note.
“In all of its dealings, the overall business will focus on social impact, corporate responsibility, and religious compliance.”
Sterling Bank is the second bank this year to restructure to a holding company, following GTCO, Nigeria’s largest lender by market capitalization. FBN Holdings, the FCMB Group, and Stanbic IBTC Holdings have already joined the fold, and Access Bank is on track to do the same.