Following anticipatory approval by the Central Bank of Nigeria (CBN), Nigeria’s largest bank by market capitalisation, Zenith Bank Plc, is set to unveil its new status as a financial holding company (HoldCo) with founder and wealthy businessman, Jim Ovia as Chairman.
A holding company is a parent business entity that holds the
controlling stock or membership interests in its holding companies.
Inside sources exclusively reveals that the 33-year-old
Tier-1 bank has completed the process of emerging a HoldCo, coming behind the
likes of Access Corporation, Guaranty Trust Holding Company and Sterling
Financial Holdings Company.
The move is planned to strengthen Zenith’s leadership
position in the financial services sector, where it has played a dominant role that
earned it the much envied Premium status on The Nigerian Exchange.
We also learnt that the United Bank for Africa (UBA) Plc, is
also expected to implement its long delayed HoldCo structure which had received
CBN’s approval about six months ago.
The deposit money banks (DMBs) renewed their interest in the
HoldCo structure in 2020 when they prioritised their core banking services for
nearly a decade.
The CBN in 2011, forced banks to give up their non-banking
businesses or restructure into a holding structure.
The apex bank, like its peers globally, believed that it was
an important risk management strategy to separate lenders from entangling with
other financial services like insurance or investments.
Last week, the CBN announced new tenure guidelines for bank
executives, a move that will provide a faster pathway for younger talented
bankers to reach executive management positions.
Zenith Bank reported impressive performance for its 2021
full-year (FY) operations as profit after tax (PAT) rose to N244.5 billion –
the best so far; and is set to improve on that for their FY 2022 report to be
announced in the first quarter.
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