South Africa’s second-biggest financial company, FirstRand, has obtained a license to run a merchant bank in Nigeria, sub-Saharan Africa’s second-biggest economy.
According to Ugochukwu Okoroafor, a spokesman for the Central Bank of Nigeria “The bank was granted a license after it met the 15 billion naira ($95.2 million) minimum capital requirement and other conditions.” FirstRand is expected to commence business early next year, he said.
After a debt crisis in 2009 almost brought the banking industry to a state of collapse, Nigeria’s central bank introduced modified licensing rules for lenders as part of reforms. Banks are either licensed as holding companies operating local and international units or as national, regional or specialized banks.
Also, First Securities Discount House Ltd., based in Lagos, said on Nov. 23 it received a merchant-banking license, bringing to two the number of such permits given by the central bank.
The license will enable FirstRand’s unit, Rand Merchant Bank, which already has an office in Nigeria “to more rapidly build out its franchise, provide products and services to the corporate and institutional client segments,” RMB’s Chief Executive Officer Alan Pullinger said.