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Wednesday, 28 November 2012 00:00
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CBN approves Merchant banking license for FSDH, FirstRand Bank

The Central Bank of Nigeria (CBN) has issued merchant banking licences to South Africa’s FirstRand Bank and Nigeria’s First Securities Discount House Limited (FSDH), in a move that signals the commencement of merchant banking in Nigeria after regulatory distinction between merchant and commercial banking was axed by the CBN 12 years ago.
The two banks are expected to commence operation by 2013.

As a merchant bank, both banks will focus on long term funding, make some assets in the economy bankable and guaranty some international loans coming into the country.

The licenses were awarded in accordance to the universal banking guidelines stipulated by the CBN in 2010. The guidelines allows banks to provide specific offerings while banks operating as merchant banks are expected to have a capital base of 15 billion naira ($95 million).

In awarding the merchant banking license to FSDH, CBN approved the bank’s bid to convert from operating as a discount house to a merchant bank.

FSDH began operation in Nigeria as the first discount house in March 1993 while it offers expert financial services to selected clientele by assisting them in achieving their financial goals. However, to retain its brand essence, the company has decided to adopt the name, FSDH Merchant Bank Limited.

FSDH says the new license will enable it to offer a broader range of services to its clients thereby deepening its client relationships and expanding its frontiers.

“Whilst the company does not underestimate the challenges that it will face, it is confident that with its corporate culture of customer orientation, high performance, image building, collaboration and learning, all obstacles that may come its way can be surmounted,” it said.

The Managing Director, FSDH Group, Mr Rilwan Belo-Osagie, said: “If the licence is granted, we intend to expand our operational scope and take advantage of greater opportunity to enhance our present competencies in securities trading, asset management, financial advisory services and investment banking.”