GTBank Gets CBN, SEC Approval For HoldCo Structure

  

About eight years after divesting its stake GT Assurance (now AXA Mansard), among others, in line with the guidelines of the Central Bank of Nigeria (CBN), the board of Guaranty Trust Bank Plc, on Wednesday said it has received regulatory nod to restructure into a financial holding company.

The CBN’s Guidelines for Licensing and Regulation of Financial Holding Companies in Nigeria defines one as “a company whose principal object includes the business of a holding company set up for the purpose of making and managing (for its own account) equity investment in two or more companies, being its subsidiaries, engaged in the provision of financial services, one of which must be a bank.”

Specifically, a statement by the company secretary, Erhi OEbebeduo, said the bank obtained an Approval-in-Principle of the CBN to commence the formal process of reorganizing into a HoldCo by means of a scheme of arrangement with its shareholders in line with the Companies & Allied Matters Act (CAMA).

The bank said it has also obtained the “o-objection” of the Securities & Exchange Commission (SEC) for the proposed scheme, which will entail an exchange of the bank’s issued shares on a one-for-one basis for shares in the HoldCo, same for the Global Depository Receipts (GDR).

According to the statement, “the board of directors of GTBank made the decision to embark on the restructuring following a comprehensive strategic evaluation of the operating and competitive environment of the Nigerian banking sector in the near term.”

The GTBank HoldCo, the statement expects, “will have a greater strategic flexibility to adapt to future business opportunities as well as market and regulatory changes than is currently the case.”

A final regulatory approval of the scheme, will however be dependent on the nod of the bank’s shareholders and the sanction of the Federal High Court, after which the bank will be concurrently delisted and the HoldCo admitted onto the official List of the Nigerian Stock Exchange (NSE) and the London Stock Exchange (LSE).

The bank will thereafter be re-registered as a private limited liability company.

Other banks currently operating as financial holding companies in Nigeria include FBN Holdings, FCMB Holdings, and Stanbic IBTC Holdings.

The latest move is coming at a time when the group missed the date for announcement of a successor to Segun Agbaje, who retires next years as Group Managing Director/Chief Executive.

Speaking during an investor earnings call session on Monday, September 7, Agbaje who would have served in his present capacity for 10 years by next year, expected that the appointment of his successor by the beginning of the fourth quarter (October).

Agbaje could assume the position of chief executive of the Holdco, while his replacement takes charge of the Nigerian arm of the bank, as was the case at FCMB Holdings.

Meanwhile, in another notification to the NSE, the bank announced the retirement of Babatunde Soyoye, who was first appointed to the board as an independent non-executive director in July 2016, after nearly four years.

https://investdata.com.ng/gtbank-gets-cbn-sec-approval-for-holdco-structure/