Some financial sector stakeholders suggest that the Central Bank of Nigeria’s (CBN) recapitalization requirements may have prompted FBN Holdings Plc to divest from FBNQuest Merchant Bank. Recently, FBN Holdings announced the sale of its entire 100% stake in FBNQuest Merchant Bank to EverQuest Acquisition, a consortium including Custodian Investments Plc, Aion Investments, and Evercorp Industries.
Boniface Okezie, Chairman of the Progressive Shareholders Association of Nigeria (PSAN), remarked that holding two banking licenses might not be beneficial for FBN Holdings. He proposed that the bank may have decided to divest from the Merchant Bank to focus on its more prominent commercial bank, using the proceeds to address other needs within the Group. He also noted the necessity for the bank to strengthen its capital base to meet the CBN’s new capital requirements.
Tajudeen Olayinka, an investment banker and stockbroker, drew parallels with a similar move in 2005 when FBN Holdings merged FBN Merchant Bank Limited with First Bank Plc and Merchant Banking Corporation (MBC Bank) to meet a CBN recapitalization deadline. Olayinka suggested that FBN Holdings might be avoiding the strain of raising capital for two subsidiaries if it does not significantly enhance the group’s earnings potential.
In a statement to the Nigerian Exchange (NGX), FBN Holdings clarified that the divestment concerns only FBNQuest Merchant Bank. Subsidiaries such as FBNQuest Capital Ltd. and FBNQuest Asset Management Ltd. are not affected by this transaction, and the divestment will not impact the operations or strategic positioning of the Group’s other subsidiaries.