Sterling Bank Plans $177m Capital Boost to Increase Lending

Sterling Bank plans to raise 35 billion naira ($177 million) in so-called Tier II capital between January and February to expand its loan book next year but sees no need to tap equity markets, it said on Thursday.

"We are pursuing Tier II capital, we are at the end of it and hopefully between January to February we would have additional debt capital," the mid-tier lender's chief executive, Yemi Adeola, told reporters in Lagos.

Adeola said he saw no need to raise fresh equity capital, adding that the commercial lender had 90 billion naira in shareholders' fund with a capital adequacy ratio of 19 percent, above the 10 percent regulatory requirement.

Shares in the bank, which have fallen 25 percent this year, shed 1.1 percent on Thursday to 1.88 naira.

Sterling intends to expand its loan book by 20-25 percent next year as the Nigerian government looks to reinvigorate the economy after the plunge in oil prices more than halved growth this year and battered public finances.

Loan growth in the first half of this year was 3.2 percent.

Rival lenders including United Bank for Africa (UBA) , Diamond Bank and Stanbic IBTC Bank have reduced lending this year, citing regulatory uncertainty and weak economic growth.