HoldCo: CBN seeks in­put into new guide­lines

Daily Trust - - BUSINESS - From Kay­ode Ekun­dayo, La­gos

Cen­tral Bank of Nigeria (CBN) is seek­ing in­put from stake­hold­ers into the draft guide­lines for li­cens­ing and reg­u­la­tion of fi­nan­cial Hold­ing Com­pa­nies (HoldCo) in the coun­try.

The apex bank in a memo signed by its Di­rec­tor, Fi­nan­cial Pol­icy and Reg­u­la­tion depart­ment, Kevin Amugo said the new li­cens­ing rules are com­ing un­der the New Bank­ing Model which per­mits banks/bank­ing groups to re­tain non-core bank­ing businesses by evolv­ing into a non­op­er­at­ing (HoldCo) struc­ture.

Un­der this Model, a non­op­er­at­ing HoldCo is ex­pected to hold eq­uity in­vest­ment in banks and non-core bank­ing businesses in a sub­sidiary ar­range­ment. The ar­range­ment seeks to ring-fence de­pos­i­tors’ funds from risks in­her­ent in non-core bank­ing businesses.

A fi­nan­cial hold­ing com­pany shall bea­source­of­fi­nan­cia­land­man­age­rial strength to the sub­sidiaries. In serv­ing as a fi­nan­cial and man­age­rial strength to its sub­sidiaries, a fi­nan­cial hold­ing com­pany shall main­tain fi­nan­cial flex­i­bil­ity and cap­i­tal­rais­ing ca­pa­bil­i­ties for sup­port­ing its sub­sidiaries. of trad­ing ac­tiv­i­ties of the com­pany in the last six months shows that the com­pany met the cri­te­ria set by the Ex­change. “The Ex­change com­menced the pi­lot pro­gramme with nine stocks - Dan­gote Ce­ment, Guin­ness Plc, Nes­tle Plc, Nige­rian Brew­eries, SIM Cap­i­tal Fund, Skye Shel­ter Fund, Nige­rian En­ergy Sec­tor Fund (NESF) and To­tal Plc.

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