Central Bank of Nigeria (CBN) has moved to revise guidelines on operations and structure of financial holding companies (FHCs) in its just published exposure draft on guidelines for the licensing and regulation of operators in Nigeria, introducing a mandatory 20 per cent capital buffer requirement and significantly restricting shared services and control across banking groups.

The draft, dated June 10, 2026 and signed by Dr. Rita I. Sike, Director of the Financial Policy and Regulation Department, is open for public comments until July 9, 2026.

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The draft requires a holding company (holdco) to maintain a minimum regulatory capital that exceeds the combined minimum regulatory capital of all its subsidiaries by at least 20 per cent. Only paid-in capital qualifies, meaning paid-up share capital plus share premium. Retained earnings, revaluation reserves, and other equity components do not count. Excess capital in one subsidiary cannot be used to cover a shortfall in another, with each subsidiary’s capitalisation assessed independently.

According to the CBN draft guideline, a holding group with a commercial bank subsidiary requiring N500 billion in minimum capital, an insurance subsidiary requiring N50 billion, and a pension subsidiary requiring N5 billion, would require the holdco to hold at least N666 billion in regulatory capital rather than N555 billion.

The draft also proposes a structural change to where foreign subsidiaries sit within banking groups. Rather than Nigerian bank subsidiaries directly holding equity in offshore operations, it is now the holdco itself, or an intermediate holdco, that must hold foreign subsidiaries directly.

According to the draft, a maximum of two hierarchies is permitted, with groups such as Access Holdings, which have significant pan-African footprints, required to review whether their offshore ownership chains comply with the new model.

On shared services, the draft significantly narrows what holdcos are permitted to provide to their subsidiaries. The only services allowed, with prior CBN written approval, are facilities, legal services, and ICT services. Risk management, compliance, internal audit, and company secretariat functions must now live independently inside each subsidiary, independently staffed and independently funded. Every shared services arrangement must be conducted at arm’s length and subjected to a value-for-money audit every two years.

The draft tightens interlocking directorship rules, limiting a holdco director to sitting on the board of only one subsidiary within the group. Collective representation of holdco directors on any subsidiary board cannot exceed 20 per cent of that board’s total membership. Cross-attendance of board or management meetings between the holdco and its subsidiaries is expressly prohibited.

On intra-group lending, any loan a banking subsidiary makes to its parent holdco is classified as a return of capital and must be fully deducted from the bank’s Capital Adequacy Ratio (CAR). Loans to other affiliates within the group attract a 100 per cent risk weight if secured and a full capital deduction if unsecured.

Furthermore, the holdco is prohibited from borrowing on the back of subsidiary guarantees, except where the loan is secured by dividend income or service level agreement payments.

Licensing fees under the new framework are structured in two stages. The application fee for Approval-in-Principle is N20 million, non-refundable, while the final licence fee is N100 million, payable via RTGS to a CBN-designated account. Non-bank promoters setting up a new holdco from scratch must deposit 100 per cent of the combined minimum regulatory capital of all proposed subsidiaries, plus a 20 per cent mark-up, with the CBN upfront before the licence is granted.

The original FHC guidelines were issued in August 2014 when Nigerian banking groups were restructuring away from universal banking into holding company structures.

The CBN said over a decade of implementation identified gaps in uneven compliance, overhead inflation, and governance practices that the revision seeks to address.