Shareholders Approves Sterling Bank, ETB merger

Shareholders of Sterling Bank Plc and Equitorial Trust Bank (ETB) Limited yesterday approved the merger of the two banks, describing the merger as a fair deal.
At their separate Extra-ordinary General Meetings (EGM)  in Lagos, shareholders overwhelmingly voted for the merger, citing opportunities for better returns and strengths of the two banks as part of the reasons for their action.

With the shareholders’ approval of the scheme of merger, Sterling Bank would issue two ordinary shares of 50 kobo each in exchange for one ordinary share of N1 each of ETB. This implies an exchange ratio of two shares for two shares exchange ratio where ETB’s share is subdivided into 50 kobo nominal value.
With the merger, shareholders of ETB including AMCON would assume 20 per cent stake in Sterling Bank Plc, consisting of 10 per cent equity stake each for existing shareholders of ETB and AMCON. ETB would also nominate a director unto the board of Sterling Bank.

Speaking at the EGM, Chairman, Sterling Bank, Dr. Suleiman Adegunwa, said that with the common values of both banks and other numerous synergies, the merger would maximise values for the customers and shareholders of both banks.

According to him, the merger would further strengthen Sterling Bank into a formidable financial institution wider branch network and strong retail franchise.
“We also envisage that the emergent Sterling Bank from the merger would be a market leader in service delivery in all locations with branches well situated in metropolitan centres in Nigeria with attractive demographic characteristics,” Adegunwa said.
Addressing shareholders on the benefits of the merger, the Group Managing Director, Sterling Bank Plc, Mr Yemi Adeola, said the bank expects to increase its earnings, reduce costs and leverage on the synergies from the two banks to consolidate its market share.

He outlined that with the merger, Sterling Bank would have opportunity to become a major player in corporate banking and other services, which would strengthen Sterling Bank’s traditional strengths in structured and trade finance, cash management and treasury.

He pointed out that the merger would lead to economies of scale that would lead to reduction in operating while simultaneously widening the market share of the bank and market penetration, providing opportunities for increased revenues.
“With this merger, we are laying the foundation for future earnings growth and better financial performance. We expect to increase earnings, cut costs and significantly build shareholder value,” Adeola said.

He pointed out that apart from acquiring the bank without any negative equity funds, having been recapitalized by the Asset Management Corporation of Nigeria (AMCON), Sterling Bank would get new cash of N8.5 billion from ETB while there are also provisions to protect the bank from any undisclosed material information.
Shareholders who spoke at the well-attended meeting commended the board and management of the bank expressing optimism that there would be better returns to shareholders.

President, Association for the Advancement of Rights of Nigerian Shareholders (AARNS), Dr. Faruk Umar, said the merger with ETB would add value to all stakeholders given the business interests of core shareholders in ETB.

President, Progressive Shareholders Association of Nigeria (PSAN), Mr. Boniface Okezie, said shareholders were supporting the merger because it was not an imposition.

National Coordinator, Independent Shareholders Association of Nigeria (ISAN), Sir Sunny Nwosu, also endorsed the business combination assuring that shareholders would always support the bank.
Brigadier Anthony Ikwe (rtd), who spoke on behalf of Zonal Shareholders Association, congratulated the board and management of the bank.

President, Shareholders United Front (SUF), Mr. Gbenga Idowu, also commended the board and management of the bank noting that the excellent management culture at the bank would enable it to maximize values from the merger.

At the separate EGM of ETB, chairman, Equitorial Trust Bank (ETB) Limited, Mr. Adewale Sangowawa, said the merger with Sterling Bank was an attractive combination for all stakeholders of ETB.

According to him, customers of ETB would benefit from a wider and better-integrated array of services and technologies; employees would enjoy the advantage and opportunities of being a part of a larger and stronger company while shareholders would have the opportunity to continue to participate in the success of a bigger enterprise.

He said the board of ETB considered the exchange ratio and terms of the business combination as fair deal noting that the merger have staved off possible liquidation and enabled ETB to achieve corporate renewal.

Nation