GTBank obtains approval from CBN, SEC to become holding company

By Chioma Obinagwam

Guaranty Trust Bank Plc (GTBank or the Bank) has said it has obtained approval in principle from the two major financial regulators in Nigeria- the Central Bank of Nigeria (CBN) and the Securities and Exchange Commission (SEC) to begin restructuring into a holding company.

The bank told Confiance News in a statement on Thursday.

“Guaranty Trust Bank Plc (GTBank or the Bank) is pleased to announce that it hasobtained the approval-in-principle of the Central Bank of Nigeria {the CBN) to commence the formal process of the reorganisation of the Bank to a financial holding company (the Restructuring), which will be implemented by means of a scheme of arrangement between the Bank and its shareholders pursuant to the Companies and Allied Matters Act (the Scheme),” the statement disclosed.

According to Investopedia, one of the best-known sources of financial information on the internet, a holding company is a business entity—usually a corporation or limited liability company (LLC). Typically, a holding company doesn’t manufacture anything, sell any products or services, or conduct any other business operations. Rather, holding companies hold the controlling stock in other companies.

The bank also said it has obtained the “No-objection” of the Securities & Exchange Commission [the SEC) in connection with the proposed Scheme.

Overview of the Restructuring

According to the statement, under the restructuring, it is proposed that the issued shares in the bank be exchanged on a one-for-one basis for the shares in a financial holding company.

The Bank’s existing Global Depositary Receipts (GDRs) are also proposed to be exchanged on a one-for-one basis for new GDRs to be issued by the financial holding company.

The Board of Directors of GTBank made the decision to embark on the restructuring following a comprehensive strategic evaluation of the operating and competitive environment of the Nigerian banking sector in the near term.

The Board expects that the financial holding Company will have greater strategic flexibility to adapt to future business opportunities as well as market and regulatory changes than is currently the case.