Central Bank of Nigeria (CBN) has approved merchant bank licence for FBN Holdings Plc through its subsidiary Kakawa Discount House Limited.
The Group Chief Executive Officer of FBN Holdings, Mr. Bello Maccido while speaking at the company’s third annual general meeting (AGM) in Lagos said the final approval was granted to the company by the apex bank on May 19.
He said “To have a merchant banking licence will be beneficiary to the shareholders medium to long-term. It will also afford the company the opportunity to pay enhanced dividend in the nearest future.”
The Shareholders have also approved the N3.26 billion recommended by the directors, however the shareholders complained that the dividend, which translates into 10 kobo per share was small.
Chairman of FBN Holdings, Mr. Oba Otudeko explained that the low dividend payout was as a result of significant reduction in dividend received from its subsidiaries.
Otudeko said “This has impacted the capacity of FBN Holdings Plc to pay dividends hence the proposed cash dividend of 10 kobo per share and a scrip issue of one for every 10 shares held translating to an 11 per cent dividend yield.
“With the retention of N79.6 billion, we are confident that the capital adequacy ratio of First Bank is adequate for its business in the short to medium term. Hence, FBN Holdings has no immediate plans for any capital raising exercise especially given the currently depressed prices in the capital market.”
On the 2014 performance of the group, Otudeko said “While the commercial banking group leveraged the growing opportunities in trade and transaction banking in our domestic markets as well as across the six West African economies in which we operate and Europe, the investment banking arm was able to seize the opportunities arising from on-going reforms in the power sector and divestment of oil and gas assets by foreign players to record a remarkable growth in earnings over the previous year.”
FBN Holdings ended 2014 with Profit before tax N92.9 billion while profit after tax rose to N82.8 billion.