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First Bank adopts HoldCo structure

By on September 30, 2012

Last week, shareholders of First Bank of Nigeria plc approved the holding company (HoldCo) structure for the bank at a court-ordered Extraordinary General Meeting, EGM. The bank is now set to submit an application to the Nigerian Stock Exchange on 3 October to request for the delisting of its shares and its replacement with shares of FBN Holding. In fact, Oba Otudeko has been named chairman of FBN Holdings.

Speaking at the court-ordered meeting, Mr. Bisi Onasanya, Group Managing Director/Chief Executive Officer, First Bank of Nigeria, said: “In line with Central Bank of Nigeria, CBN’s directive, which requires the separation of commercial banking business from other financial services businesses, First Bank is adopting a HoldCo structure.” Onasanya expressed satisfaction over the approval of the HoldCo structure by the shareholders. He however assured the shareholders that the bank will not embark on any share reconstruction as the same number of shares they have with the bank will be maintained.

“Nothing has actually changed, we are only moving to a HoldCo structure so there is nothing to be afraid of. All shareholders would be required to surrender their shares in First Bank to FBN Holdings in exchange for the issuance of the same number of shares they held in First Bank. There will be no share reconstruction,” Onasanya quipped.

However, First Bank is in the process of divesting from its subsidiary First Registrars Nigeria Limited and share profit to the shareholders.

The FBN boss said that the divestment of the banks’ shareholding in First Registrars will be completed on 30 September being the deadline given by the CBN.

According to Onasanya, the bank’s shareholdings in each of the HoldCO subsidiaries and the associated investments will be transferred to FBN Holdings while the banks shareholdings in each of the Investment, Banking and Asset management subsidiaries will be transferred to FBN Capital Limited which will in turn be owned by FBN Holdings.

The restructuring will enable First Bank to specialise in core banking business. The change is a dream come true as the plan to restructure the group was already in the pipeline before the CBN’s directive, Onasanya noted. In fact, First Bank had planned a new group governance model which had a holding company structure, he added.

The overall strategy of the restructuring was to create an operating model that would profitably grow the bank’s presence in the commercial banking market and non-banking financial services in order to achieve the aspiration to be the dominant financial services group in sub-Saharan Africa.

With the change of status, FBN seeks to enhance its leading position in Nigeria’s banking sector, streamline and co-ordinate its various non-banking financial services and as well exploit opportunities for synergies among its subsidiaries. The bank’s board and management will also exploit the new holding structure to align the subsidiaries’ ownership and operations and businesses with regulatory requirements of the CBN.

At the meeting shareholders approved the transfer to FBN Holdings, the 32,362,084,345 ordinary shares of 50 kobo each in FBN’s issued and paid-up share capital held by them, in exchange for the allotment of 32,632,084,345 ordinary shares of 50 kobo each in the issued share capital of FBN Holdings in proportion to their shareholding in the company.

First Bank, a leading Deposit Money Bank, was established in 1894. The bank offers a wide range of financial services in Nigeria and beyond. In its over 118 years existence, the bank has been making substantial investments culminating in the establishment of 11 subsidiaries. The subsidiaries offer services that cut across asset management, pension custodian, investment banking, insurance and micro-finance business.

FBN Holdings intends to sustain FBN’s leading portion in its banking practice and other financial services businesses, and as well grow bigger its local and international franchise. It also hopes to deliver bigger shareholder returns.





Source: PM News