5% Banks Shares Purchase Now Requires CBN Approval
To prevent a replay of Oba Otudeko and FBN Holdings, the Central Bank of Nigeria (CBN) now requires shareholders to obtain approval.
Some insiders in the financial services sector abused open market transactions to entrench their interest in some local banks.
Majorly, these supposed influential shareholders are owing banks they sit on large amounts in insider loans apart from obtaining credit at below market rates.
MarketForces Africa reported that the majority of Nigerian banks’ influential shareholders have loans taken through various related parties. Many times, these loans are written off for non-performance, according to details from some operators’ earnings reports.
According to new stipulations from the CBN, investors planning to acquire at least a 5.0% stake in any banking operation will need to receive prior approval or no objection from the apex bank
Commenting on the development, CardinalStone Partner said this policy is likely to prevent uncertainties linked to unexpected tussles for control of banks. Dangote Reacts to EFCC Visit to Headquarters
It could potentially provide more stability in banks’ boards and strategy, the investment banking firm said in an outlook for 2024.