Aduragbemi Omiyale
By Aduragbemi Omiyale
Trading in the shares of Sterling Bank Plc on the floor of the Nigerian Exchange (NGX) Limited has been suspended by NGX Regulation (RegCo).
Investors were prevented from trading the company’s stocks after it placed a full suspension on the financial institution on Thursday, March 30, 2023.
The decision was taken to determine the shareholders of the bank who will qualify for a scheme of arrangement between the lender and the holders of its fully paid ordinary shares of 50 Kobo each for restructuring of the organisation.
Sterling Bank wants to restructure its business model into a financial holding company (Holdco), which would require a process.
For this process to be successful, trading in the shares of Sterling Bank on the stock market must be suspended for a period, which was why the embargo was placed on the shares last week.
“Trading license holders and the investing public are hereby notified that trading in the shares of Sterling Bank Plc was suspended on Thursday, March 30, 2023.
“The suspension is necessary to prevent trading in the shares of the bank in preparation for the scheme of arrangement between the bank and the holders of its fully paid ordinary shares of 50 Kobo each for restructuring of the bank.
“The suspension is required for the purpose of determining the shareholders who will qualify for the scheme,” a notice from the NGX said.
Some commercial banks listed on the domestic bourse have recently found love in the Holdco structure, which allows them to diversify into other areas of the financial sector.
The Central Bank of Nigeria (CBN), which regulates the banking industry in the country, prohibits lenders from doing other businesses different from their core operations.
But to explore other areas of the financial sector like asset management, stockbroking, insurance and others, commercial banks are going the way of the Holdco business model, with their banking subsidiary converted into a private company.
