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Access Holdings Plc may have to reduce Access Bank’s investments in foreign banking subsidiaries by at least N215 billion to comply with the 10 per cent limit prescribed by the Banks and Other Financial Institutions Act (BOFIA), as the group works towards meeting the Central Bank of Nigeria’s March 2027 deadline.
The bank’s investments in subsidiaries stood at N446.6 billion as of September 30, 2026, representing 19.29 per cent of shareholders’ funds, against the statutory limit of 10 per cent under Section 19(8)(c) of BOFIA.
To address the gap, management said it had commenced a capital-recall programme across seven markets, alongside plans to sell minority stakes in selected subsidiaries and establish a global subsidiary and intermediate holding company structure to accommodate its international operations.
The approximately N215 billion reduction is based on the reported investment value and an implied shareholders’ funds base of about N2.32 trillion, assuming the capital base remains unchanged. The Group, however, is yet to disclose the exact amount it intends to recover from the subsidiaries.
The regulatory requirement provides that the aggregate shareholding of a bank in foreign subsidiaries must not exceed 10 per cent of its shareholders’ funds unimpaired by losses, or such other percentage as the CBN may prescribe.
At the November 5 earnings call, Access Bank Managing Director, Roosevelt Ogbonna, and other members of the management team outlined measures being pursued to address the shortfall, including the repatriation of surplus capital from selected subsidiaries, minority stake sales and the establishment of a global subsidiary and intermediate holding company structure.
Management said the programme was designed to bring the investment ratio within the prescribed limit without weakening the capital position of the affected subsidiaries or undermining shareholders’ interests. “The aim is to bring the ratio within the 10 per cent requirement while protecting each subsidiary’s capital resilience and overall shareholder value.”
The capital-recall exercise covers six African subsidiaries and one market in the international business, according to the update provided at the call. Access Holdings said capital identified for repatriation from one market had been returned to Nigeria, while the remaining exercises were at different stages of regulatory processing.
The company said shareholder and board approvals had been secured for the outstanding African subsidiaries, while applications for the necessary regulatory approvals were being pursued in the respective countries. Management expressed confidence that the outstanding recalls would be completed within the CBN’s timeline.
Ogbonna also disclosed that the group was pursuing selective minority divestments in five countries, subject to valuation, tax and regulatory considerations, while seeking to retain controlling interests in the affected subsidiaries. The sale of a 7.44 per cent stake in Access Bank Ghana was completed in July 2026.
The capital-recall and divestment programmes form part of a three-pronged strategy to address the regulatory shortfall. The third measure involves a global subsidiary and intermediate holding company framework intended to improve oversight, capital mobility and the structure through which the group manages its international operations.
Management confirmed that the CBN had given the group until March 2027 to meet the requirement, clarifying that the deadline was not December 2026. The issue is significant to shareholders because the regulatory position was the reason Access Holdings could not pay a dividend for the 2025 financial year. The group has said that resolving the BOFIA requirement is expected to remove the outstanding regulatory constraint on dividend distributions, although any payment would remain subject to the necessary approvals.
Access Holdings also disclosed that the group had met Section 7.1 of the CBN Guidelines for Financial Holding Companies, which requires a financial holding company’s paid-up capital to be at least equal to the aggregate paid-up capital of its subsidiaries.
Its paid-up capital stood at about N616.02 billion, compared with approximately N608.74 billion for its subsidiaries, leaving it with a surplus of about N7.5 billion. With that requirement addressed, the BOFIA investment limit remains the major regulatory issue affecting the group’s ability to consider dividend distributions.
Despite the regulatory challenge, Access Holdings recorded an increase in earnings in the nine months ended September 30, 2026, with profit before tax rising by 8.3 per cent to N667.36 billion from N616.25 billion in the corresponding period of 2025. Profit after tax also increased by 5.9 per cent to N474.17 billion from N447.55 billion. The improvement was supported partly by a 73.5 per cent decline in impairment charges to N92.91 billion, while net interest income after impairment rose by 32.1 per cent to N1.20 trillion. Net fee and commission income increased by 12.4 per cent to N534.94 billion.
The group’s gross earnings grew by 2.3 per cent to N3.99 trillion, although total operating income declined by 3.2 per cent to N2.06 trillion, reflecting pressure from higher funding costs and weaker other operating income. Core income, comprising interest income and fees, accounted for 95.2 per cent of the bank’s gross earnings, compared with 90.9 per cent in the corresponding period of the previous year, indicating a higher contribution from recurring income sources.
However, operating expenses increased by 11.8 per cent to N1.30 trillion from N1.16 trillion, reflecting higher personnel costs, depreciation and amortisation, among other expenses. Management attributed part of the increase to the integration of businesses acquired in the previous year, describing the associated costs as non-recurring. “This is not an increase in operating expenditure that will become a trend,” management said, adding that the incremental increases were driven by one-off costs associated with the integration process.
The group’s performance also remained below some of its original full-year financial targets. Return on average equity stood at 14.1 per cent against a target above 20 per cent, while return on average assets was 1.2 per cent compared with a target above two per cent.
