The Nation Newspaper

Tag: Sterling Bank

  • NDIC charges Jaiz bank to uphold good corporate governance 

    NDIC charges Jaiz bank to uphold good corporate governance 

    The Management of Jaiz Bank Plc has been advised to strengthen its corporate governance in order to weather the storm of economic challenges that is currently facing Nigeria’s banking industry.

    A statement from the Nigeria Deposit Insurance Corporation (NDIC), said the Corporation’s MD/CE Alhaji Umaru Ibrahim gave the advice during a courtesy call by the newly appointed Managing Director of Jaiz Bank Plc, Mallam Hassan Usman and some of his top Management staff.

    Alhaji Ibrahim said that good corporate governance was very crucial to the bank at a time of planning to expand its operations following its recent issuance of a National banking licence by the Central Bank of Nigeria (CBN).

    The NDIC boss also advised Jaiz bank to be careful in its expansion plans in order to ensure seamless service delivery to its customers. According to him, “as a pioneer in non-interest banking, the bank should partner with its peers such as Stanbic IBTC and Sterling banks which have non-interest banking windows in order to explore more sharia compliant instruments.”

    He also drew the attention of Jaiz bank to the interest being shown by muslims and non-muslims to its banking products and advised the bank to step up its public enlightenment efforts on the benefits of its products and services in order to increase deposits’ mobilisation.

    The NDIC boss also noted the challenges being faced by the bank in investing its excess liquidity due to the absence of sharia compliant investment windows, such as the “Sukuk” (project financing) and other Islamic bonds and portfolios. He noted that “while a lot of countries had tapped into the “Sukuk” investment window, Nigeria was still lagging behind in exploring such shari’a compliant investment opportunities.”

    He therefore urged the Jaiz Bank’s Management to collaborate with the Bankers’ Committee, Securities and Exchange Commission (SEC), Debt Management Office (DMO) and other relevant agencies toward the introduction of “sukuk” and other shari’a compliant investment products in order to be competitive.

    Alhaji Ibrahim also appealed to the management of Jaiz bank on the need to reduce the phenomenon of staff casualization in the banking sector. He said Jaiz Bank as a relatively young institution should avoid hiring temporary staff in view of its negative consequences on banks operations.

    In his response, the MD Jaiz Bank Plc, Mallam Hassan Usman assured the MD NDIC that Jaiz bank had established and maintained high standards of corporate governance that were driven by checks and balances to ensure that insider credits were not only performing but also kept within the approved regulatory limits.

    Mallam Usman emphasized that apart from the bank’s board oversight, its Advisory Committee of Experts (ACE), also looked into every aspect of the bank’s operations and transactions to ensure compliance with financial regulations and Islamic principles.

    In terms of the challenges of investing the bank’s excess liquidity, he informed the Corporation that the bank had made submissions to the Debt Management Office (DMO) and the Federal Ministry of Finance in order to expedite the process of developing sharia compliant investment instruments in Nigeria.

    On casualization, the Jaiz Bank MD said the bank was not unmindful of the negative consequences of the trend. He disclosed that majority of its five hundred workforce were permanent staff, adding that the bank only out sourced a few aspects of its workforce such as security staff and cleaners to enable it concentrate on its core operations.

     

  • Sterling Bank, Audax Solutions partner

    Sterling Bank, Audax Solutions partner

    Sterling Bank Plc in partnership with Audax Solutions Limited, an education technology solutions company, will be flagging- off a Computer Science Education (CSE) programme called Audax Code School.

    The code school programme is aimed at bridging the digital skills gap in Nigeria, empower children and teachers in both rural and urban areas, foster creativity and creative thinking skills through information and communications technology learning and encourage careers of underprivileged youth through Science Technology Engineering and Mathematics (STEM) Education.

    The training programme which is aimed at also deepening awareness of Computer Science Education among children and youth will cover Summer Code School, Africa Code Week, Computer Science Education Week, Hour of Code Week, and Train the Trainer Sessions.

    Sterling Bank in a statement released at the weekend commended Audax Solutions for initiating the programme, saying that participants who took part in previous programme raised “our hope that we still have in Nigeria, a crop of children with potentials to be among the best in the world in the area of computer education, if given the right exposure and encouragement” and this informed the reason for the support of the 2016 edition.

  • Sterling Bank launches Back-to-School campaign

    Relief may have come the way of parents, guardian, teachers and proprietors of schools in Nigeria as Sterling Bank Plc launches it’s the Back-To-School Campaign. The campaign is aimed at providing succor for all stakeholders in the sector as schools resume in September.

    The primary target for the campaign are the primary and secondary schools (administrators, owners and teachers) while the secondary audience are all primary and secondary school-students and their parents.

    Areas covered under the campaign include School financing, Asset Finance, Textbook and Educational Materials Finance for schools; School fees finance for parents; Coding and Robotics Summer Boot Camp for children, Household Equipment finance and Training for teachers to mention a few.

    The Bank’s Group Head, Strategy & Finance, Mr. Shina Atilola in a statement made available to reporters at the weekend explained that the school fees financing solution was introduced to provide parents with instant financing for school fees and allow them put their kids in school while awaiting salaries and other receivables.

     He explained that under the Bank’s Asset finance scheme, existing and new account holders will qualify for short-term financing against receivables while “Sterling Bank can finance acquisition of Buses, ICT Infrastructure, Interactive Boards and other items the school may wish to purchase in the Back-to-School season under the asset finance scheme”.

    The Bank’s chief strategist explained that Schools in the books of the Bank can access finance for a 90-day tenor at very competitive rates compared to the industry benchmark. “This would be an incentive to school owners  as surveys have shown that a large number of schools have challenges with payment of salaries and for renovation projects when school fees are not fully received’’, he explained.

    Mr. Atilola added that existing and prospective schools can also enjoy free deployment of our Eduportal and Payment Gateway at no cost to the school. The solution, he noted, provides a platform to integrate the payment of school fees, levies and any other school-related payments. The platform also  aids record-keeping, and make for seamless day-to-day management of operations in schools.

    While the Bank offers schools a quick financing solution to purchase textbooks and learning materials from major Publishing Houses and Bookshops like Learn Africa Plc, Doroena Books and other designated outlets for the school year, Mr. Atilola explained that Schools that open salary accounts for their teachers this season will have their teachers qualify automatically for our the Bank’s Personal Financial Management and other Teacher training programmes (for both local and foreign courses)

  • Sterling Bank concludes plan for N35b new capital in H2

    •Improves assets, costs efficiency amidst first half headwinds

    Sterling Bank Plc is concluding arrangements to raise N35 billion tier 2 capital in the second half of this year, as improved assets quality and lower cost of fund steadied the performance of the bank in the first half of this year.

    Interim report and accounts of Sterling Bank Plc for the six-month period ended June 30, 2016, released at the weekend at the Nigerian Stock Exchange (NSE) showed that the bank continued to benefit from its credit risk management and efficient cost management as the proportion of non-performing loans dropped further to 2.8 per cent by June 2016 as against 4.8 per cent recorded in comparable period of 2015.

    It should be noted that the 2.8 per cent ratio of non-performing loan is far below the industry threshold of 5.0 per cent and represents one of the best in an industry challenged with non-performing loans. The report also showed that the bank’s cost of funds declined to 4.7 per cent as against 5.9 per cent, underlining the increasing success of the bank’s retail banking strategy and the preference by depositors for its brand.

    The results came on the background of general depression in earnings in the financial services industry and several other industries due to a period of sustained deterioration in the domestic economy during the first half of 2016. The economy, which has been posited to be in recession, was impacted by depressed commodity prices, continued sabotage of oil assets, weak investor confidence and a slow convergence of both monetary and fiscal policy.

    Managing Director, Sterling Bank Plc, Yemi Adeola, said the bank would in the second half of the year continue to prioritise operating efficiency and ensure moderate loan growth; while continuing to diversify funding sources as our retail banking strategy gains traction.

    He added that the bank also remained committed to its plan to conclude its N35 billion tier 2 capital raising.

    Key extracts showed that net interest income increased by 31.9 per cent to N25.6 billion in first half 2016 as against N19.4 billion in corresponding period of 2015. This was driven by a 22 per cent decrease in interest expense resulting in a 1240 basis point improvement in net interest margin to 61.7 per cent. Non-interest income, however, reduced from N15.2 billion in first half 2015 to N8.5 billion in first half 2016. Altogether, gross earnings stood at N50.06 billion in first half 2016 as against N55.04 billion in comparable period of 2015.

    Meanwhile, net operating income increased marginally from N30.2 billion to N30.5 billion. Profits before and after tax stood at N4.4 billion and N4 billion respectively.

    The balance sheet of the bank continued to improve. Net loans and advances increased by 36.5 per cent to N462.3 billion largely driven by foreign exchange revaluation. Also, customer deposits increased to N627.9 billion from N590.9 billion. Total assets excluding contingent liabilities increased by 20 per cent N959.2 billion by June 2016 as against N799.5 billion recorded by December 2015.

  • Sterling Bank bags Best Non-Interest Banking award

    Sterling Bank Plc has been awarded the Non-Interest Bank of the Year – Africa 2016, for its Non-interest banking window, Sterling Alternative Finance. The award courtesy “The European,” is one of the major categories at the Global Banking & Finance Awards held in London.

    Sterling Bank commenced Non Interest Banking in 2013 when the Central Bank of Nigeria (CBN) granted the Bank the license to operate the window.

    The bank in a statement made available over the weekend noted that the Award was conferred on the Bank based on its success story in the last three years coupled with its ability to use non interest banking contracts  to structure transactions in the most unique manner.

    With about 200 branches offering non interest banking services, the Bank’s coverage which is considered the best in Africa, quality of staff, consultants and advisors such as Sheikh Abdulkader Thomas who belongs to several advisory boards globally also gave the Bank an edge over competitors.

    The statement from the Bank reads further: “Since 2013, we have achieved major milestones which include a line of US$30 million from the Islamic Corporation for Development (ICD) and $25 million from the International Islamic Finance Trade Corporation (ITFC).

    Both institutions are members of the Islamic Development Bank (IDB).

  • Sterling Bank ‘ll consolidate on ‘positive ratings’

    Sterling Bank ‘ll consolidate on ‘positive ratings’

    The Executive Director, Finance & Strategy of Sterling Bank Plc, Mr. Abubakar Suleiman, has said the bank would consolidate on the positive ratings by the various international rating agencies by ensuring that it continues to deliver quality services to its customers and adhere to best practice as applied to banking worldwide.

    Abubakar, who attributed the ratings by Global Credit Rating (GCR), Moody’s and Lafferty Bank Quality Ratings (LBQR) to the lender’s strong performance and resilience amid challenging operating conditions, noted that the ratings is a validation of its business models.

    Earlier, GCR  affirmed Sterling Bank’s national long-term and short- term ratings of BBB (NG) and A3(NG), with the outlook accorded as stable.

    Similarly, Moody’s Investors Service had also assigned B2 Issuer rating to the bank.

    This, according to Moody’s, is a confirmation of the Bank’s “solid assets quality metrics and provision coverage, improvements to the Bank’s  Information Technology (IT) infrastructure and risk management processes as well as its high liquidity buffers and a solid deposit funding base”.

    Assessing the bank’s quality, the Lafferty Bank Quality Ratings (LBQR) also this year, reckoned Sterling Bank to be among the top 10 in the world, top three in Africa (after Capitec and Barclays Africa) and the top bank in Nigeria.

    The Lafferty Group approach to bank ratings involves an evaluation of key quantitative and qualitative criteria such as strategy, culture, customer care, brand promise and financial performance.

    Michael Lafferty, Chairman, Lafferty Group had statement that “banks that score well on Lafferty Bank Quality Ratings tend to trade at a premium price to their tangible book value”.

    GCR in a report made available to newsmen by Sterling Bank in Lagos at the weekend attributed its rating to its strong performance and resilience amidst challenging operating conditions.

    Part of the GCR Report reads: “Sterling’s total assets amounted to N796.4bn (representing a market share of 2.8 per cent) at FYE15. The bank’s capital base grew 12.2 per cent in FYE15, solely through internal capital generation, with the risk weighted capital adequacy ratio (“RWCAR”) improving to 17.5 per cent at FYE15 (FYE14: 14.0 per cent). To further strengthen its capital base and support asset growth, the bank is in the process of raising up to N35 billion Tier II capital expected to be concluded in the third quarter of FYE 16. Sterling Bank, “The one-customer bank”, is a full-service national commercial bank with an asset base above N800 billion with over 187 business offices and more than 800 ATMs (automated teller machines) nationwide.

  • Sterling Bank dumps Keystone acquisition plan

    Sterling Bank dumps Keystone acquisition plan

    Sterling Bank Plc has withdrawn its bid to buy Keystone Bank Limited over the price sought for the lender rescued bridge bank.

    “We felt we wouldn’t get it at the price we are willing to pay,” Abubakar Suleiman, the Chief Financial Officer for Sterling Bamk, told Bloomberg, adding: “Keystone also didn’t fit in with the lender’s “current strategy.” He, however, did not give more details.

    Keystone Bank Limited is the last of the three bridged lenders bought by the Asset Management Corporation of Nigeria (AMCON), set up by the government to buy bad loans after a debt crisis in 2009 threatened to cause the industry to collapse.

    Keystone has assets of N318 billion ($1.1 billion) and operates two international units, according to Amcon, which appointed Citigroup Inc.’s Nigerian unit and FBNQuest, a unit of FBN Holdings Ltd., as advisers on the sale.

    “Sterling Bank will focus on growing its existing businesses, unless “another opportunity comes for inorganic expansion,’’ Suleiman said. According to him, the lender plans to raise N65 billion in Tier 2 capital with 20 per cent of the first tranche of N35 billion of bonds to be sold this month.

    “The bank expects loans to rise by 20 per cent this year following the devaluation of the naira,” Suleiman said. That compares with an earlier projection of less than 10 per cent.

    Sterling Bank Chief Executive Officer (CEO), Yemi Adeola, had at a meeting with journalists in Lagos late last year, said six commercial banks are likely to seek mergers and acquisitions this year. The mergers, he predicted, are triggered by the shock created in their assets and balance sheet sizes in the face of declining oil prices.

    Adeola said he envisaged possible shrinking in the number of local banks this year. “There are already moves suggesting that trend,” he said, but did not name any bank. The bank chief said two international banks were discussing with local lenders on possible acquisition.

    Adeola said the Nigerian banking industry was the most regulated sector in the country, thereby affecting banks’ performance.  “To say that everything will be rosy in 2016 will be deceiving ourselves. I think if the opportunities arise for banks to pursue further consolidation, we could see two or three,” he said.

  • Sterling Bank, NASME hold workshop

    Sterling Bank, NASME hold workshop

    Sterling Bank Plc in collaborations with Lagos Chapter of the Nigerian Association of Small & Medium Enterprises (NASME) will from today kick off a three-day Micro, Small, Medium Enterprises (MSME) workshop for members of the association. The workshop is scheduled to hold at the Federal Institute for Industrial Research (FIIRO) Oshodi, Lagos.

    The bank had organised similar workshops in Port Harcourt and Kaduna for MSME operators as part of its nationwide workshop to empower MSMEs. The next workshop will hold in Ibadan, the Oyo State capital.

    NASME was registered in 1996 as a Business Membership Organisation (BMO) to co-ordinate and promote the growth and development of the MSME sector of the economy, and has pursued its objective through strategic collaborations with institution such as Sterling Bank Plc.

    The bank in  a statement  said the workshop would provide participants with the opportunity to fully appreciate the concept of entrepreneurship and  better position them  to improve their managerial capacity in the areas of risk management and profit maximisation.

    “It will  also cover Basic Accounting Skills, Customer Service and Team Building, Sales and Marketing, Essentials of Business Plans and Human Resources Management, among others,” the bank added.

    The Executive Director, Finance & Strategy of the bank, Mr. Abubakar Suleiman announced at a press conference earlier in the year that the Bank would be anchoring a series of workshops for MSME operators in various states nationwide.

  • GCR affirms Sterling Bank’s BBB rating

    GCR affirms Sterling Bank’s BBB rating

    An international rating agency,  Global Credit Ratings (GCR),  at the weekend affirmed Sterling Bank’s national long-term and short- term ratings of BBB(NG) and A3(NG) respectively, with the outlook accorded as stable.

    The rating which is valid until July 2017 comes after another global ratings agency, Moody’s Investors Service, affirmed the bank’s local and foreign currency issuer ratings of B2 with stable outlook.

    Moody’s had described Sterling Bank as a stable financial institution with solid asset quality, robust Information Technology and risk management processes, and high liquidity buffers. The Agency also assigned a Counterparty Risk Assessment (CRA) of B1(cr)/Not Prime(cr) to the Bank with stable outlook.

    It attributed the rating to the bank’s strong performance and resilience amidst challenging operating conditions.

    It said: “Sterling’s total assets amounted to N796.4 billion (representing a market share of 2.8 per cent) at FYE15. The bank’s capital base grew 12.2 per cent in FYE15, solely through internal capital generation, with the risk weighted capital adequacy ratio (“RWCAR”) improving to 17.5 per cent at FYE15 (FYE14: 14.0 per cent).

    To further strengthen its capital base and support asset growth, the bank is in the process of raising up to N35 billion Tier II capital expected to be concluded in the third quarter of FYE 16″.

    Notwithstanding the 100 basis points contraction recorded in net interest margin, Sterling Bank, according to the Agency, reported a net profit after tax (“NPAT”) of N10.3billion for FYE15, representing an improvement of 14.4 per cent in the 2014 operating year.

    “Performance was supported by non-interest income which grew 13.8 per cent to N29.3billion (buoyed by growth in trading securities). Further, total operating expense line declined 1.9 per cent to N49.7billion, resulting in a reduction of the cost ratio to 72.2 per cent from 73.6 per cent in the full year ending December 31, 2014.”

    According to the Agency, the Bank’s gross Non Performing Loan (NPL) ratio ended at 4.8 per cent in 2015, which was below peer average of 6.1 per cent and regulatory limit of five per cent.

  • Sterling Bank, App Zone partner on unbanked customers

    Sterling Bank Plc has signed up to AppZone’sCreditClub to leverage its agent network and banking technology platform to serve customers outside traditional branches.

    CreditClub is an alternative banking channel solution developed for licensed banks with primary application in the area of delivering basic banking services to remote customers outside traditional branches. The solution works in collaboration with affiliated third party entities.

    The CreditClub technology addresses branchless banking challenges by providing a robust software core and embedded core banking application that seamlessly integrate with portable mobile phones and point of sale (PoS) devices as well as third party core banking applications. It also offers mobile banking self-service applications and functionality for issuing and managing debit cards.

    “This banking solution is expected to create financial inclusion and extend the bank’s services to the remote, rural and semi-urban areas,” the firm explained.