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Anxiety as banks struggle to meet divestment deadline

By on March 28, 2011

There are indications that many banks are yet to divest from their insurance subsidiaries, a few days to the deadline given by the Central Bank of Nigeria (CBN).

The apex bank had fixed March 31, this year, for banks to divest or form a group holding structure. It was gathered that the committee set up by CBN and the National Insurance Commission (NAICOM) on the matter, recently engaged auditors to look into the books of the insurance firms.

Sources said the development aimed is at ensuring that investors are invited into the companies.

The Assistant Director, Corporate Affairs, NAICOM, Mr Lucky Fiakpa, said no results have been recorded on the matter, adding that NAICOM and CBN are still awaiting the results from auditors.

He said NAICOM is involved in the process, and it is working assiduously to ensure the safety of the insurance firms after the divestment. He noted that the process would be properly managed to ensure that no firm folds up after the exercise.

He said some of the banks are discussing with CBN on how to operate a holding structure, stressing that most firms may tow that line or be forced to merge to enable them to stay afloat.

Source : The Nation