Mon, Apr 11 2011

Nigeria‘s FCMB on Monday became the latest bank to announce plans to form a holding company and apply for an international banking licence to comply with new regulations issued by the central bank.

The central bank last year said it would stop issuing universal banking licences and enforce new minimum capital requirements for lenders in a bid to avoid a repeat of 2009’s near collapse of several banks.

Under the new regulations it requires lenders to either sell all non-core businesses or form a holding company if they intend to carry out asset management and capital market activities.

Below are details of the new licence regime, the various company structures, and a list of banks in each category.

INTERNATIONAL BANKING LICENCE

This category of banking licence requires a minimum capital level of 50 billion naira. There are two models — those that have opted for a holding company and those that will divest:

The following banks have opted to keep subsidiaries and adopt a holding company structure:

— First City Monument Bank

— First Bank

— Stanbic IBTC

— United Bank for Africa

The following have announced plans to divest from non-banking subsidiaries:

— Access Bank

— Diamond Bank

— Fidelity Bank

— Guaranty Trust Bank

— Skye Bank

— Zenith Bank

NATIONAL BANKING LICENCE

This category of banking licence requires a minimum capital level of 25 billion naira.

The following have announced plans to divest from non-banking subsidiaries:

— Sterling Bank

— Unity Bank

REGIONAL BANKING LICENCE

This category of banking licence requires a minimum capital level of 10 billion naira. Regional banks and can only operate in 6-12 Nigerian states.

— Wema Bank

RESCUED BANKS

Eight of the nine lenders rescued in a $4 billion bailout by central bank in 2009 are seeking new investors to recapitalise them. No announcement has yet been made on their structure and business model.

Source: Reuters