CBN’s proposed HoldCo rules: What it means for banks and shareholders

The Central Bank of Nigeria has published an exposure draft revising its guidelines for the licensing and regulation of Financial Holding Companies (FHCs) in Nigeria.

The draft, dated June 10, 2026, and signed by Dr. Rita I. Sike, Director of the Financial Policy and Regulation Department, is open for public comments until July 9, 2026.

The original guidelines were issued in August 2014 when Nigerian banking groups were restructuring away from universal banking into holding company structures. Over a decade of implementation, the CBN says it identified gaps in uneven compliance, overhead inflation, and governance practices that were never intended. This revision is the CBN’s attempt to fix those gaps.

Nairametrics explains what this draft policy could mean for the banking sector and its shareholders.

A Financial Holding Company (FHC) is a non-operating parent company that owns equity stakes in two or more financial services subsidiaries, at least one of which must be a bank. It does not trade, lend money, or serve customers directly. Its only job is to hold shares and provide broad policy direction to the group.

Under this structure, a bank like Guaranty Trust Bank sits underneath GTCO Holding Company Plc, which in turn owns stakes in the insurance, pension, and payments subsidiaries within the group.

What this means: The FHC is essentially a corporate landlord as it owns the businesses but is not supposed to run them.

The CBN’s concern, evident throughout this draft, is that many holdcos have been quietly running their subsidiaries, directing credit decisions, sharing staff, and pooling resources in ways that blur the line between owner and operator.

One of the notable structural changes in the draft is where foreign subsidiaries sit within the group. Under the previous framework, Nigerian banks within the group could directly hold equity in offshore subsidiaries.

The new draft changes this, proposing that it is now the holdco itself (or an intermediate holdco) that must hold foreign subsidiaries directly.

A maximum of two hierarchies is permitted —a parent holdco and one intermediate holdco for offshore holdings. Beyond that requires exceptional CBN approval.

What this means: Groups like Access Holdings, which have significant Pan-African footprints, will need to review whether their offshore ownership chains comply with this model.

Any Nigerian bank subsidiary currently holding foreign banking licences in its own name may need to restructure, transferring those holdings up to the parent or intermediate holdco.

Implication if approved: Restructuring offshore ownership chains is not a simple administrative exercise. It involves regulatory approvals in multiple jurisdictions, potential stamp duty costs, and possible tax consequences. Groups with complex Pan-African structures could face significant transition costs and timelines.

This is the most financially consequential provision in the draft. A holdco must maintain minimum regulatory capital that exceeds the combined minimum regulatory capital of all its subsidiaries by at least 20%.

To illustrate, if a group has a commercial bank subsidiary requiring ₦500 billion in minimum capital, an insurance subsidiary requiring ₦50 billion, and a pension subsidiary requiring ₦5 billion, the holdco must hold at least ₦666 billion in regulatory capital — not ₦555 billion.

The CBN also makes clear that only paid-in capital counts — that is, paid-up share capital plus share premium. Retained earnings, revaluation reserves, and other components of equity do not qualify.

Crucially, excess capital in one subsidiary cannot be used to cover a shortfall in another. Each subsidiary’s capitalisation is assessed independently.

What this means: This rule effectively requires the holdco to maintain its own capital buffer over and above what is already sitting in the subsidiaries. It prevents a situation where a group looks well-capitalised in aggregate but is thinly capitalised at the holdco level.

Implication if approved: For groups that are currently relying on consolidated capital to meet regulatory minimums, this could require fresh capital injection at the holdco level. Coming on the heels of the CBN’s banking recapitalisation exercise, which already stretched many groups, this is an additional capital demand that shareholders will need to fund. Expect rights issues or private placements from affected holdcos within 12–24 months of the guidelines taking effect.

Under the current framework, holdcos have been providing a range of centralised services to their subsidiaries, such as human resources, risk management, compliance, internal audit, legal, IT, and facilities. This is common in financial conglomerates globally, as it reduces duplication and costs.

The draft significantly narrows what is permitted. The only services a holdco can provide to its subsidiaries, with prior CBN written approval, are: facilities (office accommodation, electricity, security, cleaning), legal services, and ICT services. Everything else requires specific CBN approval. Risk management, compliance, internal audit, and company secretariat are conspicuously absent from the approved list.

Every shared services arrangement must be conducted at arm’s length, approved by the boards of both the holdco and the subsidiary, and subjected to a value-for-money audit every two years.

What this means: The CBN is essentially saying that risk management, compliance, and internal audit must live inside each subsidiary, independently staffed, independently funded, and independently governed.

A group compliance officer sitting at the holdco level and serving all subsidiaries simultaneously is no longer acceptable under this framework.

Implication if approved: This will materially increase operating costs across Nigerian financial conglomerates. Each subsidiary will need to build out its own compliance, risk, and audit infrastructure.

For smaller subsidiaries, say, a micro-finance bank or a pension fund manager within a large group, maintaining a full independent compliance function could be disproportionately expensive.

There is a real risk that this accelerates consolidation, with groups divesting smaller non-core subsidiaries that can no longer justify the standalone compliance overhead.

The draft tightens interlocking directorship rules significantly. A director of the holdco can only sit on the board of *one* subsidiary within the group — not multiple. The collective representation of holdco directors on any subsidiary board cannot exceed 20% of that board’s total membership.

No member of Holdco staff can serve as a non-executive director at the FHC or any of its subsidiaries. And cross-attendance of board or management meetings between the holdco and its subsidiaries is expressly prohibited.