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Access Bank to hold court-ordered meeting ahead of holdco transition

Access

Access Bank will convene a meeting of its shareholders by the order of the Lagos division of the Federal High Court, putting it on track for a transition to a holding company.

The meeting holds Thursday at the lender’s Lagos head office, with attendance expected to be by proxy in fidelity to Covid-19 protocols. It will be streamed live on the lender’s website, according to a regulatory filing at the Nigerian Exchange on Friday.

Increasingly, banks in Nigeria are adopting the holdco model, which enables them to branch out into non-banking business and diversify earnings at a time lenders are facing depletion of income.

The structure also permits the emerging parent company, in this case to be known as Access Holdings Plc, to own controlling stakes in all its subsidiaries and influence the decision-making process even though it will not be involved in the day-to-day running of the units.

On Wednesday, Sterling Bank announced its receipt of tentative approval from the central bank to transform to a holding company, joining rivals FBN Holdings, Stanbic IBTC Holdings, the FCMB Group and GTCO,

which completed its own restructuring earlier this year.

Access Bank, Nigeria’s biggest lender by asset base, has consummated several mergers and acquisitions deals across Africa this year and is hoping 30 per cent of the group’s profit for 2021 will come from operations outside its home market Nigeria.

With the holdco structure, the emerging entity will be amply protected from the risk of exposure, given that the parent company will not be liable should any of its subsidiaries go under.

Once the special resolutions are passed at the meeting, Access Bank will proceed to obtain approvals from regulators including the Central Bank of Nigeria and the Securities and Exchange Commission, and thereafter apply for a final holdco licence, according to the scheme of arrangement.

The process is to be completed by April 15, 2022, when the holdco shares will be listed in Lagos.

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