Zenith Bank Gets CBN’s Approval to Join Other Financial Institutions Operating as Holding Companies in Nigeria
- Zenith Bank has received approval from the Central Bank of Nigeria to operate as a financial holding company
- The approval allows it to change its organisational structure and establish a non-operating financial holding company, Zenith Holdco Plc
- With this move, Zenith Bank joins a few other Nigerian banks, including First City Monument Bank and Access Bank, that have already adopted the model
Zenith Bank has received approval in principle from the Central Bank of Nigeria to restructure and operate as a financial holding company.
In a statement signed by the Company Secretary, Michael Otu, on Friday, March 3, 2023, and submitted to the Nigerian Exchange, the company revealed plans to change its organisational structure.
With this change, the organisation will have a banking subsidiary and other subsidiaries in the financial services sector.
Part of the statement reads:
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“The CBN has granted approval-in-principle for Zenith Bank to operate a non-operating financial holding company structure.
“Furthermore, the CBN approved Mr Jim Ovia as the Chairman of Zenith Holdco Plc (in-formation and for Mr Jim Ovia to also continue as the Chairman of Zenith Bank until the commencement of Zenith Holdco.”
Joins the list of banks with holding structure
This move will increase the number of banks operating as financial holding companies in the country.
Currently, there are a few banks that have already adopted this business model, including First City Monument Bank (FCMB) and Access Bank.
Holding companies allow banks to diversify their operations and offer a broader range of financial products and services. They can also help banks manage risks and improve efficiency by consolidating operations and resources across different business units.
The CBN has supported this trend, encouraging financial institutions to explore different business models that can help drive growth and innovation in the sector.
In addition to Zenith Bank, the CBN recently approved Guaranty Trust Bank (GTBank) to operate as a financial holding company.
As the financial sector continues to evolve, more institutions will likely adopt this business model and transform their operations to meet their customers' needs better.
List of holding company
- Access Holdings Plc
- FBN Holdings Plc
- FCMB Group Plc
- FSHD Holding Company
- GTB Hold Co
- Stanbic IBTC Holdings Plc
- Zenith Bank
First Bank's top director Shobo resigns
Meanwhile, in another report, the First Bank of Nigeria's deputy managing director, Gbenga Shobo, resigned in a similar development.
The guidelines limit executive directors, deputy managing directors, and managing directors to a maximum tenure of 10 years.
The new guidelines are expected to affect many other bank executive and non-executive board members.