First Bank asks Shareholders to Approve Restructure
First Bank said on Monday it will seek shareholders’ approval to transfer its subsidiaries into a new holding company, in order to meet a regulation that risky capital market business be kept separate from retail and regular business banking.
The central bank two years ago directed lenders in Africa’s second-biggest economy to either sell their stakes in subsidiaries involved in activities including insurance, asset management, capital market and investment banking – or adopt a holding company structure, where those activities are separate from the holding of retail deposits.
In doing so, it aimed to prevent depositors’ funds being used to speculate in the capital markets, to avoid a repeat of the near collapse of several overleveraged banks in a 2009 financial crisis.
First Bank, a top-tier Nigerian lender, said it will ask shareholders’ on Sept. 24 to approve the transfer the assets of its subsidiaries into a holding company called FBN Holdings Plc, including its capital market and asset management units.
It will subsequently delist the bank from the Nigerian Stock Exchange, it said in a notice to shareholders, who will get stakes in the new entity equivalent to their existing holdings.