CBN BHC Rules Could Trigger Bank Restructuring, Fitch Warns

By Johnson Emmanuel 

Fitch Ratings has warned that the Central Bank of Nigeria’s (CBN) proposed regulations for Bank Holding Companies (BHCs) could trigger significant organisational restructuring across Nigeria’s banking sector if implemented.

The warning was contained in Fitch’s September 14, 2026 report, ‘African Banking Groups’ Cross-Border Expansion to Continue’, which examined the expansion strategies of major African banking groups and the implications of the proposed Nigerian framework.

DEVELOPMENT:

The CBN’s exposure draft seeks to revise the licensing and regulatory framework for Financial Holding Companies (FHCs), including the ownership structure of offshore subsidiaries.

Under the existing model, Nigerian banks can directly own foreign banking subsidiaries. The proposed framework would require such subsidiaries to be held directly by the holding company or through an intermediate holding company.

Fitch said the change could require affected banking groups to reorganise their ownership structures.

“Fitch believes that, if effected, these regulations could prompt several organisational restructurings,” the ratings agency stated.

It noted that most African banking groups have holding companies that directly own domestic banks, foreign banking operations and non-bank financial businesses.

“Nigerian and Moroccan banking groups have a different structure, with the domestic banking entity having shareholdings in the foreign banking subsidiaries,” Fitch stated.

DATA:

Nigeria’s five largest banks represented 52 percent of domestic banking-sector assets at end-2025, according to Fitch.

The agency said these lenders benefit from low funding costs, extensive branch networks and established digital and agency banking channels.

Fitch also noted that higher CBN paid-in capital requirements could make Nigeria less attractive to foreign banking groups seeking entry.

In July, Renaissance Capital warned that the proposed rules could require Nigerian banking groups to raise more than N1.7 trillion in additional capital.

SIGNIFICANCE:

For investors, the proposed framework could affect group structures, capital allocation, subsidiary ownership and returns on equity.

Renaissance Capital’s report, ‘Nigerian Banks: More Capital, Declining Returns’, identified a proposed requirement for holding companies to maintain a capital buffer at least 20 percent above the combined paid-up capital of subsidiaries as a significant element of the reforms.

The investment bank said that the requirement could affect shareholder value, profitability and capital-management strategies.

NEXT MOVE:

The key watch points are the final CBN framework, implementation timelines, capital requirements and how affected banking groups restructure their offshore subsidiaries.

Investors should also monitor any additional capital-raising plans and their implications for existing shareholders.

OUR LENS:

The proposed BHC framework goes beyond corporate restructuring. It could alter how Nigerian banking groups organise capital, control offshore operations and manage risks across jurisdictions.

The CBN’s stated direction is to strengthen corporate governance, ring-fence risks and reinforce the distinction between holding companies and operating subsidiaries.

Fitch’s warning suggests that the transition could carry material organisational and capital consequences for banks with significant cross-border operations.

Johnson Emmanuel is a journalist, covering business, investment, monetary & fiscal policies, CBN, economic affairs and issues of significance to Nigeria’s corporate and public sectors.