The Holding Company will manage FCMB and its subsidiaries.
First City Monument Bank (FCMB) Plc, this week, announced its transition into a holding company structure having completed all the regulatory and legal processes required to set up a Holding Company to manage the governance of First City Monument Bank Plc and its subsidiaries.
The Holding Company will be known as FCMB Group Plc.
The firm said the need for the transition started with the directive of the Central Bank of Nigeria (CBN), under Regulation 3 of 2010, that all deposit banks in Nigeria should divest their non-core banking subsidiaries and consolidate into one Holding Company.
The Bank made this known in a report titled ‘FCMB Plc, Facts behind the listing’ and also via a communiqué by its Investor Relations department.
“On 10 December 2012, the shareholders of the bank approved the restructuring at an Extra-Ordinary General Meeting. Our implementation roadmap was elongated due to the significant merger transaction in 2012 and the need to dispose of seven non-permissible/ non-strategic subsidiaries,” the firm said.
Under the Holding Company structure, the firm said shareholdings in First City Monument Bank (FCMB) Plc have been exchanged one–for-one for FCMB Group Plc shares, effectively making them the owners of FCMB Group Plc, in the same ratio as the previous holdings in the bank.
Fate of Shareholders
The over–riding rationale and goal for a HoldCo, according to the firm, is to leverage FCMB Group Plc, to create shareholder value. The firm said all fully paid ordinary shares of FCMB Plc. (“the Bank”) have been exchanged for the ordinary shares of FCMB Group Plc (“Holdco”); the shareholders of FCMB Plc received a total of 19,041,068,033 ordinary shares in FCMB Group Plc, credited as fully paid in exchange for a total of 19,041,068,033 ordinary shares in FCMB Plc held by them.
In essence, the firm said each shareholder of FCMB Plc. (“the Bank”) received one (1) ordinary share in FCMB Group Plc (HoldCo) in exchange for every one (1) ordinary share held in FCMB Plc as at June 21, 2013. Former shareholders of FCMB Plc. own FCMB Group Plc 100 per cent, and continue to own all the subsidiaries, save for those divested. Former shareholders of FCMB Plc own FCMB Group Plc in the same proportion as their holding in FCMB Plc.
“Through ownership of FCMB Group Plc, shareholders will continue to own all the subsidiaries 100 per cent, including First City Monument Bank Plc and its subsidiaries (FCMB Capital Markets Limited, CSL Stockbrokers Limited, Credit Direct Limited, FCMB (UK) Ltd, Arab Gambian Islamic Bank Ltd, First City Asset Management Ltd and CSL Trustees Ltd),” the firm said.
FCMB Group Plc
FCMB Group Plc will have three wholly-owned direct subsidiaries, namely First City Monument Bank Plc, FCMB Capital Markets Limited and CSL Stockbrokers Limited, while the other entities in the Holding Company will report into the three direct subsidiaries.
FCMB Group Plc has also been listed on the Nigerian Stock Exchange (NSE) with the ticker symbol FCMB; while the 19,041,068,033 ordinary shares held by the bank’s 529,632 shareholders have also been transferred and listed.
Four out of the seven non-permissible/ non-strategic subsidiaries – City Securities (Registrars) Ltd, FinBankCapital Ltd, FinBank Homes Ltd and FinBank Securities & Asset Management Ltd – have been sold, subject to regulatory approval. The sale of FinBank Insurance Brokers Ltd, FinBank Insurance Company Ltd and Arab-Gambia Islamic Bank Ltd is ongoing, while Fin Registrars Limited has been liquidated.
The Marketing & Communications department of the bank confirmed that the holding company and the different subsidiaries will each function as separate and distinct companies with a separate Board of Directors, a Chief Executive or Managing Director and a Chairman.
The bank said the Board of Directors of the FCMB Group Plc and those of the subsidiaries have been accordingly constituted. Peter Obaseki has been formally appointed Managing Director of FCMB Group Plc. and will report to the Board of Directors of FCMB Group Plc., which will be chaired by Jonathan Long.
Other members of the Board of FCMB Group Plc include: Bismarck Rewane (Non-Executive Director), Ladi Balogun (Non-Executive Director), Mustapha Damcida (Non-Executive Director), Tope Lawani (Non-Executive Director), Olusegun Odubogun (Non-Executive Director-Independent), Olutola Mobolurin (Non-Executive Director) and Martin Dirks (Alternate to Mr. Tope Lawani).
The reconstituted 11-member Board of FCMB Plc includes: Otunba Olutola Senbore (Chairman), Bismarck Rewane (Non-Executive Director), John Udofa (Non-Executive Director), Tokunbo Ishmael (Non-Executive Director), Nigel Kenny (Non-Executive Director), Mfon Usoro (Non-Executive Director), Ladi Balogun (GMD/CEO), Segun Odusanya (DMD), Olufemi Bakre (Executive Director), Adam Nuru (Executive Director) and Nath Ude (Executive Director).
The firm said the Holding company, FCMB Group Plc, will create additional value by enhancing stakeholder engagements and reporting standards. It said it will also provide an additional layer of non-operational governance to ensure sustainable earnings, consistent and complementary strategies and cultures across the bank and other companies.
“We believe that the Holding Company structure, will ring-fence depositors’ funds from investment banking activities, which remain critical to the growth and development of the Nigerian economy. The structure will create a more diversified revenue base, whilst also allowing for focused management of the distinct businesses, thereby enhancing shareholder and customer value,” it said.
The firm said implementation of the scheme is almost concluded with the delisting of the bank on June 21, 2013 and the listing of FCMB Group Plc as the holding company today.
The organisation is optimistic of a positive outlook for 2013 and the near future including: improving net interest margins from accelerated retail lending and current and savings accounts growth, strong retail non-interest income growth, strong rebound of corporate banking and increasing contribution from investment banking among others.
In 2010, the Central Bank issued “Regulation 3” (scope of banking activities and ancillary matters, No. 3, 2010), which required banks to divest their non-banking businesses or retain them under a holding company (“HoldCo”) structure.
A number of banks have also gone the restructuring route to adhere to the regulatory body. These include First Bank, UBA and Stanbic IBTC.