Nigerian billionaire Femi Otedola’s FBN Holdings to divest merchant banking unit

Omokolade Ajayi -
Key Points
  • FBN Holdings is divesting its FBNQuest Merchant Bank unit to enhance asset quality and focus on core banking, pending regulatory approval.
  • The sale involves EverQuest Acquisition LLP, a consortium of Custodian Investments, Aion Investments, and Evercorp Industries, as the preferred bidder.
  • Under Femi Otedola’s leadership, FBN Holdings reported a 93.7% profit surge, reaching $217 million, and significant asset growth.

First Bank of Nigeria Holdings PLC (FBN Holdings), led by Nigerian billionaire Femi Otedola, is divesting its merchant banking unit, FBNQuest Merchant Bank Limited. This move is part of a broader strategy to enhance asset quality and strengthen operations.

The divestment was revealed in a formal “Notification of Divestment from FBNQuest Merchant Bank Limited” sent to the Nigerian Exchange (NGX), in line with the regulatory requirements of the NGX Rulebook. The notification confirmed that FBN Holdings has entered into a Share Sale and Purchase Agreement to transfer its 100 percent equity stake in FBNQuest Merchant Bank.

EverQuest consortium wins competitive sale

The preferred bidder in the competitive sale process is EverQuest Acquisition LLP, a consortium comprising Custodian Investments PLC, Aion Investments, and Evercorp Industries. The completion of the transaction is pending approval from the relevant regulatory authorities.

FBN Holdings said the divestment aligns with its strategy to streamline its portfolio and focus on core banking. The sale is part of its long-term growth plan, led by Chairman Femi Otedola, who holds an 11.67-percent stake and has been instrumental in driving the group's transformation.

FBN Holdings’ historical legacy and Femi Otedola’s strategic influence

FBN Holdings, one of Nigeria's top financial services groups, remains a key player in the nation's economy. Its flagship unit, First Bank of Nigeria, is the country's oldest commercial bank with a 130-year history, known for advancing financial inclusion and economic development in West Africa. The bank operates in Ghana, Senegal, Gambia, and globally, with branches in London, Paris, and a Beijing office.

Under Otedola’s stewardship, FBN Holdings has experienced a period of remarkable financial performance. The group reported a 127-percent profit increase in 2023, reaching $219.25 million (N310.01 billion), up from $96.4 million (N136.31 billion) the previous year. Otedola’s leadership, alongside his position as chairman of Geregu Power PLC, has been crucial, both as an investor and strategic leader, further cementing his influence on the Nigerian Exchange.

Financial performance highlights and growth trajectory

FBN Holdings reported a 93.7-percent profit surge to N360.27 billion ($217 million) for the months ending June 30, up from N186.02 billion ($112.2 million) in the same period in 2023. The boost came from N432.2 billion ($260.3 million) in net gains from financial instrument adjustments, offsetting N192.6 billion ($116 million) in foreign exchange losses.

Retained earnings jumped to N945.95 billion ($570 million) from N588.9 billion ($354.7 million), while total assets rose to N23.4 trillion ($14.1 billion) from N16.9 trillion ($10.2 billion), solidifying its position as one of Nigeria’s largest financial groups.

As FBN Holdings continues to expand its operations, the divestment of FBNQuest Merchant Bank will allow the group to focus on its core banking services, enhance its asset quality, and pursue further growth opportunities under Otedola’s strategic leadership.