Sterling Financial Holdings Company Plc (Sterling HoldCo) has confirmed that its subsidiaries, Sterling Bank and The Alternative Bank (AltBank), have successfully met the revised minimum capital requirements set by the Central Bank of Nigeria (CBN). While this achievement reflects regulatory compliance, it also underscores the growing strain on mid-tier financial institutions under tightening supervisory standards.
The recapitalisation process, stretching from December 2024 to October 2025, was capital-heavy and defensive in nature, aimed primarily at safeguarding operating licences rather than driving strategic expansion. The initial ₦75 billion private placement completed in December 2024 generated ₦73.86 billion in net proceeds, with ₦68.8 billion directed to Sterling Bank and ₦5 billion to AltBank. This allocation highlighted the heavier capital strain on the conventional banking arm and raised questions about the sustainability of earnings relative to capital demands.
The subsequent ₦28.79 billion rights issue, though oversubscribed by ₦10.29 billion, required regulatory restructuring after approvals in May 2025 limited the allotment to ₦26.639 billion. The oversubscription was converted into a private placement to enable AltBank to qualify under the non-interest banking capital framework. In October 2025, Sterling HoldCo launched an ₦88 billion public offer that was similarly oversubscribed, with ₦96.69 billion cleared for recognition as additional capital. Altogether, ₦153 billion was injected into both subsidiaries, underscoring the scale of reinforcement required to meet compliance thresholds.
Analysts caution that raising capital is only the first hurdle. Deploying it efficiently in Nigeria’s volatile macroeconomic environment, marked by inflation, currency instability, elevated credit risk, and subdued consumer demand, will be the real test. Without strong risk-adjusted returns, the enlarged capital base could dilute shareholder value. The Group’s dual-bank structure serving both conventional and non-interest segments adds operational and compliance complexity, increasing cost pressures at a time when sector margins remain sensitive to policy shifts.
Further commitments are already on the horizon, with Sterling HoldCo planning a ₦10 billion injection into SterlingFI Wealth Management Limited to meet new minimum capital requirements for Capital Market Operators. This reflects a broader regulatory tightening cycle that may continue to absorb liquidity and investor appetite.
Sterling HoldCo reported strong 2025 results, including a 99 per cent rise in profit before tax, 46 per cent growth in gross earnings, total assets nearing ₦4 trillion, and shareholders’ funds increasing 39 per cent to ₦424 billion. Yet these figures must now be measured against the significantly enlarged capital base. Sustaining growth under tougher monetary conditions will require disciplined credit management, operational efficiency, and consistent profitability.
Ultimately, Sterling HoldCo’s recapitalisation demonstrates compliance but also reflects the growing cost of survival in Nigeria’s evolving banking landscape, where maintaining licence status increasingly demands aggressive capital mobilisation and sustained investor confidence.
By Kehinde Ibrahim, Lagos
