Stanbic IBTC present facts behind the figures

Stanbic IBTC reassures shareholders on holding company structure

L-R: Oscar Onyema, Chief Executive Officer, Nigerian Stock Exchange, Sola David-Borha, Chief Executive Officer, Yinka Sanni, Deputy Chief Executive Officer, both of Stanbic IBTC Bank during the presentation of Facts Behind the Figures by the bank at The Nigerian Stock Exchange on Wednesday, July 25, 2012.

Stanbic IBTC Bank has assured its shareholders that their stake in the group will remain unchanged when its impending holding company structure is finalized. The group recently announced that it would seek shareholders’ approval to reorganize the banking institution into a holding company structure.

Mrs. Sola David-Borha, chief executive officer of Stanbic IBTC Bank, during a meeting with stockbrokers in Lagos on Wednesday July 25, said the clarification had become necessary in order to allay concerns of shareholders who may be worried about the potential impact of the restructuring on their shareholding.

“The proposed restructuring will result in no adverse changes to the rights and ownership of existing shareholders of Stanbic IBTC. I wish to state categorically that the value of your investment will not be adversely affected by the change in legal structure. For example if a shareholder owns 1% of the bank he will own 1% of the new holding company.” She added that “the number of shares held by a shareholder will however change as four out of every five shares will be cancelled. The shareholder will be paid 50 kobo for each share cancelled and the remaining share will be converted to shares in the holding company at a ratio of one to 2.67.”

The proposed share cancellation means that excess capital will be returned to shareholders, David-Borha said, adding that the share capital of the bank will be reduced by a total of N7.5 billion as a result of cancellation of 15 billion out of the current 18.75 billion ordinary shares. The holding company will have 10 billion issued and fully paid up shares of 50 kobo. Shareholders of the bank will become shareholders of Stanbic IBTC Holdings with the same proportionate ownership, save for adjustments for fractional shares, which will be converted to cash. Subsequently, Stanbic IBTC Bank will become a wholly owned subsidiary of Stanbic IBTC Holdings PLC and will apply to the CBN for a commercial banking license.

The new structure, David-Borha stated, is such that shareholders will benefit from the entire business. In addition, the bank’s retail depositors will not be exposed to the risks associated with the non-banking activities of the remainder of the group. All customers of Stanbic IBTC and its subsidiaries will continue to enjoy the services currently provided through the other subsidiaries.

David-Borha said Stanbic IBTC Bank will transfer all of its shares in its five subsidiaries to Stanbic IBTC Holdings PLC. The operating subsidiaries of Stanbic IBTC Holdings PLC are Stanbic IBTC Bank (including Stanbic Nominees Nigeria Limited), Stanbic IBTC Pension Managers Limited, Stanbic IBTC Asset Management Limited, Stanbic IBTC Stockbrokers Limited, Stanbic IBTC Trustees Limited, Stanbic IBTC Ventures Limited, Stanbic IBTC Capital Limited and Stanbic IBTC Investments Limited. Stanbic IBTC Capital Limited and Stanbic IBTC Investments Limited are newly incorporated companies.

Upon the approval of the new structure, trading on the shares of Stanbic IBTC Bank will be suspended and its shares delisted from the daily official list of the NSE, while the entire issued and fully paid share capital of Stanbic IBTC Holdings PLC will be listed on the NSE.

David-Borha reiterated that the holding company structure is consistent with the approach of the Standard Bank Group, to which Stanbic IBTC belongs, which allows the various subsidiaries to leverage on the group-wide expertise of the parent model. The move will also enable the bank provide end-to-end financial solutions to its clients in line with its vision, while the employee base would not be affected adversely as all existing lines of business will remain.

The new structure will be proposed to shareholders at a court-ordered meeting slated for Abuja on August 9. The holding company is in compliance with a Central Bank of Nigeria stipulation which requires banks to either divest from non-core banking businesses or adopt a holding structure.

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