FBN Holdings’ move is to boost the capital position of its commercial banking unit
Nigeria’s commercial lending group, FBN Holdings Plc has sold its insurance unit, FBN Insurance, and invested the N25 billion proceeds into its lending business as equity.
FBN Holdings Chief Executive Officer Urum Kalu Eke said the group wanted to focus on improving shareholder value with the divestment from its life insurance firm, FBN Insurance, and boost the capital position of its commercial banking unit, First Bank to 16.53 per cent as of June.
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The regulatory minimum is 15 per cent for local lenders with international licences.
Recall that FBN Holdings said on Wednesday that pretax profit fell 31.1 per cent in the first-half to 12.73 billion naira.
In 2010, the central bank directed lenders to either sell their stakes in subsidiaries involved in activities including insurance, asset management and investment banking – or adopt a holding company structure, where those activities are separate from the holding of retail deposits.
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SOURCE: Reuters
