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First Bank Gets Go-ahead to restructure

By on August 7, 2012

First Bank said last week it had won regulatory approval to transfer its subsidiaries into a newly-formed holding company, in line with regulatory requirements to separate core lending from other businesses.

The central bank two years ago scrapped the universal banking model and directed lenders in Africa’s second-biggest economy to sell their stakes in non-banking subsidiaries or adopt a holding company structure.

Onche Ugbabe, chief strategy officer, said the lender had received a nod from the Securities and Exchange Commission to proceed with the new structure and was waiting for approval from the central bank and shareholders.

“We expect to conclude the implementation by the third quarter,” Ugbabe told a conference call with 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.