March 01, (THEWILL) – 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.
Competent inside sources told THEWILL, exclusively, 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.
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.
This newspaper 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, sources at the regulator, told THEWILL will provide a faster pathway for younger talented bankers to reach executive management positions.
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
