Sterling Bank Plc has announced it is considering a new subsidiary as it transforms into a holding company. Under the new plan, the structure will consist of new subsidiaries, including a conventional bank and a Non-Interest Bank (NIB), following approval in principle recently obtained from the Central Bank of Nigeria (CBN).

Managing Director and Chief Executive Officer (MD/CEO) of the bank, Mr. Abubakar Suleiman, who disclosed this in Lagos recently said the bank’s decision to operate as a Holding Company is driven by its plan to spin off its NIB window, which became operational in January 2014, into an autonomous entity.

He said the bank is currently in the process of meeting the conditions for the final approval from the CBN.

The CEO said the Holding Company is designed to operate on three major premises: Specialisation, Partnership and Digitisation. He said, “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).”

According to him, The NIB will focus on building partnerships that connect individuals and businesses leveraging technology to create business optimisation while solving the individual’s daily financial needs. He added that the overall business will focus on social impact, corporate responsibility and the highest ethical standards in its dealings.

Suleiman said the group’s digitisation drive will create an enabling environment for both financial institutions to grow while providing services and support to build efficiencies in different ecosystems.”

He said, the execution of the plan is fully dependent on an interwoven operating model of Agility, Specialisation and Digitisation, adding that for it to be successful, the bank will require people who are adaptable and knowledgeable in running processes that are simple, quick and tech-led to ensure efficiency.

The CEO said the bank believes that the proposed structure incorporates efficiencies around operations and financing efforts that will support individual businesses in reaching their full potentials through increased portfolio diversification as the Holding Company structure enables the individual businesses  achieve greater results based on focused management of the distinct entities.

He said other benefits of the restructuring will include improved efficiency resulting from the consolidation of key functions such as compliance, risk management and other support functions. This is expected to yield improved prospects for individual business growth and enhanced corporate governance, which serve to promote a consistent culture across the group and quality of service to customers, thereby facilitating sustainability of earnings.

He added that, it would lead to better access to capital by leveraging the consolidated financial strength of the group which would have been otherwise difficult for each individual subsidiary company.

Suleiman said by, “Going into the Holding Company structure, our desire is to entrench our business model premised on impact 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.”