Nigeria: FBN Holdings Gets Merchant Banking License
The nation’s apex bank, the Central Bank of Nigeria (CBN), has approved the merchant banking license to one of the subsidiaries of FBN Holdings, Kakawa Discount House.
Managing Director of FBN Holdings, Mr. Bello Maccido, disclosed this in Lagos yesterday at the third annual general meeting of FBN Holdings while defending the dividend payout of 10 kobo per share offered by the group in the 2014 financial year as against 110 kobo paid in 2103 financial year.
He said the apex bank gave the approval on Monday after the group it has fulfilled all requirement set by the CBN.
His words: “Let me say this that we are paying 10 kobo per share this year because we are preparing for a better and brighter future. We are retaining profit to beef up our capital and we have increased our holdings in Kakawa Discount House from 46 percent to 100 percent. The investment bank is now wholly owned by us.
“Another good news is that the CBN on Monday has graciously approved the request for merchant banking license for Kakawa Discount House. To have a merchant banking license in our stable is a strong one for us and our business”.
“You, our shareholders, are going to be the biggest benefactors of this new business, it is an additional avenue to sell investment banking products to its customer”.
Also speaking on the low dividend payout by the company, Maccido said it was as a result of the significant reduction in dividend received from its subsidiaries especially First Bank Limited.
“As a result of increased capital requirements by its regulator, occasioned by the adoption of Basel 2 capital accords, First Bank has reduced its payout ratio and retained substantial portion of its profit to boost capital. This has impacted the capacity of FBN Holdings to pay dividend, hence the proposed cash dividend of 10 kobo per share and a scrip issue of one for every ten shares held, translating to an 11 per cent dividend yield”, he said.