Nigerian lender Access Bank Plc will slash its 87 percent stake in Zambian subsidiary to 49 percent, following Zambia’s increased recapitalization order for banks in the country and an instruction from Nigeria’s apex bank, CEO of the bank Aigboje Aig-Imoukhuede revealed.
Zambia escalated the minimum capital requirement for foreign banks from a meagre $2.5 million to $100 million while local banks were required to raise a minimum of $20 million.
Also, the Central Bank of Nigeria (CBN) said in a statement on July 26, that Nigerian parent banks would not be allowed to recapitalize their outside-Nigeria subsidiaries with personal funds but must generate new funds to recapitalize the foreign subsidiaries.
According to the regulator, banks that can’t generate more funds for foreign units in the local market will have to shut them down.
Aig-Imoukhuede has said the Lagos-based lender will “convert” 38 percent of its Zambian stake to a local bank without disclosing the lender.
Yesterday, Access hit an 18-month high value following the announcement of its 26.3 billion naira ($166 million) first-half income which doubled last year’s 8.05 billion naira ($50.1 million).
Shares climbed consecutively for seven days, gaining 4.1 percent to 9.1 naira yesterday, the bank’s highest since March 15, 2011.
In 2011, Access Bank Plc acquired the troubled Intercontinental Bank, one of the eight distressed banks bailed out by CBN in 2009 following a major debt crisis that rocked the Nigerian banking sector, thereby becoming one of the biggest banks in Nigeria.