In a recent interview with Sterling Bank’s CEO, Abubakar Suleiman, he shared insights into the bank’s transition to a holding company (Holdco) structure, the benefits it will bring to shareholders and the Nigerian economy as a whole.
Explaining the Holdco structure, Suleiman said it involves the creation of an umbrella company (the Holdco) that houses multiple subsidiary companies operating in different sectors. The Holdco then provides oversight and strategic direction for each subsidiary to maximize efficiency and profitability.
According to Suleiman, Sterling Bank’s transition to a Holdco structure is aimed at creating a more diversified and efficient banking group. He believes this will yield a higher return on equity and enhance the bank’s resilience to external shocks.
When asked about the benefits of the Holdco structure to Sterling Bank shareholders, Suleiman emphasized that it creates the opportunity for the bank to unlock value and boost shareholder returns.
“One of the major benefits of the Holdco structure is that it enables the bank to retain more earnings and reinvest them in growing our businesses. This allows us to build more sustainable long-term value for our shareholders,” he said.
Suleiman also noted that the Holdco structure would enable Sterling Bank to offer a wider range of financial services to customers while investing in new growth areas such as fintech and digital banking.
In addition to benefiting Sterling Bank shareholders, Suleiman believes the Holdco structure could have significant positive effects on the Nigerian economy as a whole. He explained that the structure encourages greater corporate governance and transparency, which are critical to attracting foreign investment.
“By creating a more transparent and efficient corporate structure, we are positioning Sterling Bank and its subsidiaries to attract more investment into Nigeria. This will help to drive economic growth and create jobs,” he said.
In conclusion, Suleiman expressed his optimism about the future of Sterling Bank as a Holdco, stating that it puts the bank in a strong position to become a leading player in the Nigerian financial services industry while creating value for all stakeholders.
As the bank continues with its Holdco transition, it is clear that shareholders and the wider economy have much to gain from this strategic move.
