Trouble for Nigerian Banks in Congo as Country's Central Bank Imposes Sale of 45% Stake
- The Congolese central bank has instructed financial institutions to sell a 45% stake in three years
- According to the apex bank, the development is aimed at spreading institutional risk
- Nigerian banks in the country have committed to working in line with the new directive
Legit.ng journalist Zainab Iwayemi has over three years of experience covering the Economy, Technology, and Capital Market.
Nigerian banks in Congo could be affected by the new directive by the Central Bank of Congo. The instruction mandates banks to sell 45% of their stake within three years.
The apex bank wants traditional banks in the country to have at least four unrelated shareholders holding a minimum of 15% each.
This must include the current owner of the bank to allow the institution to spread risk.
Source: UGC
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This means that most of the banks in the country would need to sell some portion of their equity by 2026 to meet in line with the instructions.
However, the Congolese Banking Association has said that its members, made up of 15 lenders, were still reviewing the instructions. It stated that this would enable it to ascertain the feasibility and implications of the proposed requirements.
Bloomberg reported that several banks are still yet to grasp the new directive, while some have already started taking action.
Two of Kenya's biggest banks, Equity Group Holdings Plc and KCB Group Plc, recently bought stakes in three Congo banks.
Standard Bank said it is still discussing the new directive with Apex Bank, bankers' associations, and stakeholders.
Access Bank plc and executive for African subsidiary Seyi Kumapayi said the institution is still studying the new regulation.
FBN Holdings Plc expressed commitment to complying with the regulations.
In a recent report, however, the governor of the Central Bank of Nigeria (CBN), Olayemi Michael Cardoso, told Nigerian banks to prepare for a new round of banking sector recapitalization as the nation works towards the $1 trillion Gross Domestic Product (GDP) target.
Access leads, UBA 3rd: Top Nigerian banks with highest loan amounts to customers in 2023
Legit. ng reported that Nigerian banks listed on the Nigerian Exchange have significantly increased their lending to customers during the first half of 2023.
According to data obtained by Legit.ng, eleven banks, as of the end of June 2023, have disbursed N26.83 trillion to their customers.
The banks surveyed are First Bank Holding Company, Access Holding Company, Zenith Bank, Guaranty Trust Holding Company (GTCO), United Bank for Africa (UBA), First City Monument Bank (FCMB), Fidelity Bank, Stanbic IBTC Bank, Sterling Bank, Unity Bank, and Wema Bank.
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Source: Legit.ng
