Sterling Bank Goes Holdco As Nigerian Banks Explore New Models

Sterling Bank Goes Holdco As Nigerian Banks Explore New Models

Sterling Bank joins the holdco (holding company) bandwagon before GTBank which I expect to get there in weeks. GTBank has a different incentive: the GCEO is hitting his 10th CEO tenure (max by regulations) and to remain as boss, he needs a holdco to control the bank. Update: the news is that Access Bank Nigeria has also received approval to turn into a holdco.

Sterling Bank has got the Central Bank of Nigeria (CBN)’s approval to move from stand-alone commercial bank to a holding company (holdco).The Nation reported that the bank is on the verge of obtaining the final approval to convert to a holding company.

According to the report, Sterling Bank, in accordance with banking regime requirement, has divested from its non-bank subsidiaries. The regime requires banks with non-bank subsidiaries to divest or adopt holdco structure.

Explaining the structure, Sterling Bank CEO, Abubakar Suleiman said the bank’s desire to operate as a holding company was driven by its plan to spin off its non-interest banking window which became operational in January 2014 into an autonomous entity.

He explained that the holdco structure enables the non-interest bank and other non-core businesses achieve greater results based on focused management of the distinct businesses while there would be improved efficiency resulting from the consolidation of key functions such as compliance, risk management and other support functions, yielding improved prospects for individual business growth.

For Sterling Bank, I do not think holdco is the fix it needs. Sterling Bank made N5.4 billion in net profit in H1 2020 when Zenith Bank went home with N104 billion. By the law of business, Sterling has a real challenge ahead as banks become platforms where the strongest could get stronger. Yes, it is a positive continuum now. 

I had proposed years ago for Sterling Bank to buy Paystack, a fintech, when it was cheap. My postulation was based on one thing: a challenger banking institution in Nigeria cannot be a bank using technology, but a tech company that offers banking services. Sterling Bank, standalone or holdco, does not meet the marginal cost acidic test of that tech nativity. And that is the issue.


1. Advance your career with Tekedia Mini-MBA (Feb 7 – May 7, 2022): top global faculty, online, self-paced, $140 (or N60,000 naira). Click and register here.

2. Click and register for Tekedia Startup Masterclass and master the secrets from start-up to unicorn. Cost is N180,000 naira or $400.

3. Click to join Tekedia Capital Syndicate and own a piece of Africa’s finest startups with a minimum of $10,000 investment.

Share this post

Post Comment