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FirstBank gets SEC’s approval to restructure
FirstBank said last week that it had won regulatory approval to transfer its subsidiaries into a newly-formed holding company, in line with regulatory requirements to separate core banking from other businesses.
The Central Bank of Nigeria (CBN), two years ago, scrapped the universal banking model and directed banks to sell their stakes in non-banking subsidiaries or adopt a holding company structure.
Chief Strategy Officer, Onche Ugbabe, said the bank had received a nod from the Securities and Exchange Commission (NSE) to proceed with the new structure and was waiting for approval from the CBN and shareholders.
“We expect to conclude the implementation by the third quarter,” Ugbabe told a conference of analysts.
Rivals UBA and Stanbic IBTC Bank, the local unit of South Africa’s Standard Bank, said recently they would form holding companies to retain their subsidiaries, including asset management operations.
FirstBank, one of Nigeria’s top tier lenders, said it had no need to boost the capital bases of its offshore units, following new rules from the central bank on how lenders use local funds abroad and as other African countries tighten requirements for foreign lenders.
The bank said its offshore units in the United Kingdom and Democratic Republic of Congo were adequately capitalised and that it had no concern about the new central bank rule.
The central bank has issued a directive to lenders restricting them from recapitalising offshore units from funds sourced at home, in order to avoid capital flight and save a weak naira which has lost 3 per cent since April.
“In the unlikely event that we need to raise capital for subsidiaries, there are many options we can explore ... we can also reduce dividend payments,” Chief Executive, Bisi Onasanya, said.
Onasanya said the bank was not bullish on an African expansion strategy because it still wanted to strengthen its position at home.
Analysts said the new capital rules might hinder Nigerian banks’ expansion plans across the continent.Share