Banking & Finance

Zenith Bank Gets CBN’s Node To Become Holding Company, Joins Other Financial Institutions

Zenith Bank has received the go-ahead in principle from the Central Bank of Nigeria (CBN) to restructure and operate as a financial holding company.

BrandNewsDay reports that Zenith Bank, in a statement signed by the Company Secretary, Michael Otu, on Friday, March 3, 2023, and submitted to the Nigerian Exchange, the company revealed plans to change its organisational structure. Zenith Bank becomes the latest financial institution to become a holding company.

With this move, Zenith Bank joins a few other Nigerian banks, including First City Monument Bank and Access Bank, that have already adopted the model.

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With this change, the organisation will have a banking subsidiary and other subsidiaries in the financial services sector.

The statement reads parts, “The CBN has granted approval-in-principle for Zenith Bank to operate a non-operating financial holding company structure.

“Furthermore, the CBN approved Mr Jim Ovia as the Chairman of Zenith Holdco Plc (in-formation and for Mr Jim Ovia to also continue as the Chairman of Zenith Bank until the commencement of Zenith Holdco.”

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This move will increase the number of banks operating as financial holding companies in the country. Currently, there are a few banks that have already adopted this business model, including First City Monument Bank (FCMB) and Access Bank.

Holding companies allow banks to diversify their operations and offer a broader range of financial products and services. They can also help banks manage risks and improve efficiency by consolidating operations and resources across different business units.

The CBN has supported this trend, encouraging financial institutions to explore different business models that can help drive growth and innovation in the sector. In addition to Zenith Bank, the CBN recently approved Guaranty Trust Bank (GTBank) to operate as a financial holding company.

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As the financial sector continues to evolve, more institutions will likely adopt this business model and transform their operations to meet their customers’ needs better

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