26 November 2012

Nigeria: CBN Grants Firstrand, First Discount Merchant Banking Licence

Ijebode — Central Bank of Nigeria, CBN, has granted merchant banking license to South African FirstRand and First Discount House Limited, saying the nation's external reserves has risen further to $46 billion.

Director of Corporate Affairs of CBN, Mr. Ugo Okoroafor, revealed this, weekend, at the annual conference of Finance Correspondents Association of Nigeria, FICAN, in Ijebu Ode, Ogun State.

He explained that the licencing is in line with CBN's new banking model, saying, "the banks have met the minimum capital base for merchant banking which is N15 billion. He said FirstRand is partnering with a local firm and would commence operation early next year with a capital base of N16 billion while FSDH will cease operations as a discount house, and now function as merchant bank."

He also indicated that several other institutions have applied for merchant bank licence and the apex bank would like to see more regional banks and community banks that will take care of the interest of small and medium businesses.

He said: "Foreign investors have a renewed confidence in Nigeria hence the investment by FirstRand. We need the growth in Foreign Direct Investment, FDI, rather than foreign portfolio investment. We need people to come and invest physically so that this country can grow and create employment.

"We need to continuously grow our excess crude account reserves since Nigeria is depending on oil as the only major source of revenue and the oil will soon dry. So we need to save for the rainy days."

Okoroa for, expressed satisfaction with the level of cooperation between the monetary authority and fiscal authority in the country, saying, "The era of fiscal dominance is coming to an end. There is now collaboration between fiscal authority and monetary authority."

FirstRand Bank is a subsidiary of the First Rand Group, which is a financial services provider in South Africa. The group has its headquarters in Johannesburg, South Africa.

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