Fitch Warns CBN Rules May Force Bank Restructuring

The Central Bank of Nigeria’s (CBN) proposed Bank Holding Company (BHC) regulations could force several Nigerian banks to overhaul their ownership structures, transfer foreign subsidiaries and reorganise parts of their businesses, Fitch Ratings has warned.

The global ratings agency said the proposed framework could trigger significant organisational restructuring across the banking industry, particularly among lenders with extensive operations outside Nigeria.

Fitch disclosed this in its latest report, “African Banking Groups’ Cross Border Expansion to Continue” as seen by Nairametrics. The warning follows the CBN’s exposure draft on the licensing and regulation of Financial Holding Companies (FHCs), which seeks to strengthen corporate governance, ring fence risks and establish a clearer separation between holding companies and their operating subsidiaries.

Under the existing structure, several Nigerian banking groups have their domestic banking entities directly owning foreign banking subsidiaries. Fitch said this differs from the structure adopted by most major African banking groups, where a holding company directly owns the domestic bank, foreign banking operations and non bank financial services businesses.

“Nigerian and Moroccan banking groups have a different structure, with the domestic banking entity having shareholdings in the foreign banking subsidiaries,” Fitch stated, noting that the proposed CBN framework could require affected Nigerian banks to fundamentally realign these arrangements. “Fitch believes that, if effected, these regulations could prompt several organisational restructurings,” it said.

Under the proposed framework, Nigerian banks with offshore subsidiaries may have to transfer ownership of those subsidiaries from the operating bank to the financial holding company. Where direct ownership through the parent holding company is not practical, banks could also be required to establish or use an intermediate holding company through which their foreign subsidiaries would be owned.

Fitch’s assessment comes as Nigerian banks continue to expand across African markets, even as Nigeria itself has attracted relatively limited interest from other African banking groups seeking to establish operations.

The agency attributed this partly to the strength of incumbent lenders, macroeconomic challenges and regulatory requirements. Nigeria’s banking sector, Fitch noted, remains moderately concentrated, with the five largest banks accounting for 52 per cent of domestic banking sector assets at the end of 2025.