CBN 10% Rule Forces Access Holdings Plc to Restructure Overseas Investments

Nigeria’s largest financial services group by reach, Access Holdings Plc, has commenced a strategic restructuring of its international investment portfolio following a new regulatory directive by the Central Bank of Nigeria (CBN) that limits banks’ exposure to foreign subsidiaries.
The policy, anchored in Section 19(8) of the CBN Guidelines for Financial Holding Companies, mandates that Nigerian banks must not exceed 10 per cent of their shareholders’ funds in equity investments outside the country. The rule has triggered a compliance process for Access Holdings, which has significantly expanded across Africa and key international markets in recent years.
Speaking during an investor call, Roosevelt Ogbonna, Chief Executive Officer of Access Bank Plc, confirmed that the group has been given a 12-month window to align with the directive. He noted that engagements with the regulator are ongoing to ensure a seamless transition.
The development marks a critical juncture for Access Holdings, whose aggressive pan-African growth strategy has seen it acquire multiple banking assets across the continent. In 2025 alone, the group completed high-value transactions, including the acquisition of a 74.9 per cent stake in Standard Chartered Bank’s Gambian subsidiary, the takeover of its consumer and business banking operations in Tanzania, and a controlling 76 per cent stake in AfrAsia Bank in Mauritius through its UK subsidiary.
Balancing Growth with Regulation
Industry analysts say the CBN’s directive is aimed at strengthening domestic financial stability by limiting systemic risks tied to offshore exposures. However, it also presents a recalibration challenge for banks like Access Holdings that have built strong cross-border franchises.
Despite the regulatory constraint, the group has reassured stakeholders that its international operations will remain intact. Instead of exiting markets, Access Holdings plans to rebalance ownership structures—potentially through stake dilution, partnerships, or capital restructuring—while preserving its footprint and revenue streams.
Dividend Delay, But Strong Fundamentals
The compliance process has had near-term implications for shareholders, particularly with the delay in dividend payments for the 2025 financial year. Although the board approved both interim and final dividends, payouts are pending regulatory clearance.
Management, however, maintains that the group’s capital and liquidity positions remain strong enough to support distributions once approvals are secured.
Financial performance for 2025 reflects continued resilience. Gross earnings rose by 13.3 per cent to N5.5 trillion, driven by robust interest income and a surge in non-interest revenue. Fees and commissions climbed 40.9 per cent year-on-year, while other income increased by 33 per cent.
The group also recorded improved efficiency, with its cost-to-income ratio declining to 51.7 per cent from 56.7 per cent in the previous year—an indication of better cost management despite expansion-related expenses.
Balance Sheet Expansion and Pan-African Impact
Access Holdings’ total assets grew by 24.2 per cent to N15.6 trillion, while customer deposits rose 23.4 per cent to N34.6 trillion, supported by the integration of newly acquired subsidiaries. Loans and advances increased by 16.1 per cent to N13.3 trillion, with corporate lending accounting for the bulk of the growth.
Notably, the contribution of non-Nigerian operations to earnings continues to rise. Nigeria accounted for 62 per cent of gross earnings in 2025, down from 65 per cent in 2024, while African and international businesses delivered stronger contributions—highlighting the growing importance of the group’s diversified geographic base.
Profit before tax from banking operations increased by 7 per cent to N954 billion, with over half of earnings now coming from outside Nigeria.
Rising Risks, Managed Outlook
While asset quality remained relatively stable, with non-performing loans inching up to 2.82 per cent, impairment charges surged to N303 billion due to the expiration of regulatory forbearance measures. This pushed the cost of risk higher, reflecting a tightening credit environment.
On the positive side, the group reduced its cost of funds significantly to 4.6 per cent, driven by a strong base of low-cost deposits. Capital adequacy remains robust at 18.3 per cent, while the banking subsidiary improved to 21 per cent—well above regulatory thresholds.
Outlook: Sustained Growth Amid Adjustment
Looking ahead, Access Holdings projects a return on equity above 20 per cent and return on assets exceeding 2 per cent, supported by improved earnings quality, digital expansion, and operational efficiency.
Management also expects net interest margins to strengthen beyond 5 per cent, alongside further reductions in the cost-to-income ratio as revenue growth continues to outpace operating expenses.
Analysts believe that while the CBN directive introduces short-term restructuring pressures, it ultimately reinforces prudential discipline in the banking sector. For Access Holdings, the ability to adapt its global strategy without compromising growth momentum will be key to sustaining investor confidence.
Access Holdings Plc begins restructuring foreign subsidiaries after the Central Bank of Nigeria caps overseas investments at 10%, delaying dividends but sustaining strong earnings growth.
CBN’s 10% cap on foreign portfolio investment has impacted Access Holdings’ plans to cut its stake in foreign subsidiaries to comply with overseas investment rules, even as it reports strong 2025 earnings and expansion across Africa.