In a significant corporate development, FBN Holdings Plc, one of Nigeria’s leading financial services groups, has announced the divestment of its 100% equity stake in FBNQuest Merchant Bank Limited. The sale is part of the group’s strategic realignment aimed at optimizing its portfolio and enhancing its overall financial performance.
The acquirer, EverQuest Acquisition LLP, is a consortium comprising Custodian Investment Plc, Aion Investments, and Evercorp Industries. The transaction is subject to the necessary regulatory approvals from relevant authorities.
This disclosure is contained in a notification to Nigerian Exchange Limited (NGX) and the investing public on Friday, September 7, 2024, by FBN Holdings Plc and signed by its acting Company Secretary, Adewale Arogundade.
Strategic Reallocation and Portfolio Optimization
The decision to divest FBNQuest Merchant Bank aligns with FBN Holdings’ broader strategy to focus on core areas of its business and allocate resources more effectively. While the merchant bank has contributed to the group’s revenues and assets, its relatively small size compared to the overall group has prompted a reassessment of its strategic fit.
By divesting FBNQuest Merchant Bank, FBN Holdings can potentially unlock value through the sale proceeds and concentrate on other high-growth segments within its financial services portfolio. This strategic move is expected to strengthen the group’s financial position and enhance its ability to deliver sustainable returns to shareholders.
FBNQuest Merchant Bank’s Performance and Prospects
FBNQuest Merchant Bank has established itself as a leading corporate and investment banking firm in Nigeria, offering a wide range of financial products and services to clients across various sectors of the economy. The merchant bank has demonstrated strong financial performance, reporting a profit of N7.2 billion for the year ended December 2022 and total assets of N361 billion.
Despite its solid performance, the decision to divest FBNQuest Merchant Bank reflects FBN Holdings’ strategic priorities and the desire to optimize its portfolio. The sale of the merchant bank is expected to create new opportunities for both FBN Holdings and EverQuest Acquisition LLP.
Impact on FBN Holdings’ Financial Performance
The divestment of FBNQuest Merchant Bank is likely to have a limited impact on FBN Holdings’ overall financial performance. The merchant bank represents less than 5% of the group’s total operating revenue and assets. However, the sale proceeds can be used to strengthen the group’s capital base, fund investments in other strategic areas, or return capital to shareholders through dividends or share buybacks.
Implications for the Nigerian Financial Services Industry
The sale of FBNQuest Merchant Bank to EverQuest Acquisition LLP marks a significant development in the Nigerian financial services industry. It highlights the ongoing consolidation and restructuring taking place within the sector as financial institutions seek to enhance their competitiveness and adapt to changing market dynamics.
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The transaction also underscores the growing interest of private equity firms and strategic investors in the Nigerian financial services market. EverQuest Acquisition LLP’s acquisition of FBNQuest Merchant Bank reflects the consortium’s confidence in the long-term prospects of the Nigerian economy and its financial services industry.
FBN Holdings’ decision to divest FBNQuest Merchant Bank is a strategic move aimed at optimizing its portfolio and enhancing its financial performance. The sale of the merchant bank to EverQuest Acquisition LLP represents a new chapter for both parties and has implications for the broader Nigerian financial services industry. As the transaction moves forward, it will be interesting to see how the new ownership impacts the future growth and development of FBNQuest Merchant Bank.
