Nigeria's First Bank asks shareholders to approve restructure

LAGOS- Nigeria’s 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.

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