WorldStage– Access Holdings Plc held off paying dividend for 2025 because of disapprovals—guidelines CBN enforces when a financial holding company’s capitalization falls below minimum standards. The group also holds almost twice the regulatory stake in its offshore subsidiaries.
The company managed to resolve one of the problems, and its board recommended the half-year and full-year dividends payments. But the Central Bank of Nigeria still denied it the approval.
This is the first time in 18 years the company would miss paying its dividend whose annual yield rises over 10 percent (since 2022), indicating a falling share price.
In a disclosure it published on the Nigeria Exchange Group recently, the company said the half-year dividend faced a constraint under Section 7.1 of the CBN Guidelines for Licensing and Regulation of Financial Holdings Companies.
The guideline states: A financial holding company shall have a minimum paid-up capital which shall exceed the sum of the minimum paid-up capital of all its subsidiaries as may be prescribed by the various sector regulators from time to time.
And any holding company can pay a dividend, according to Section 7.2, after “it has complied with any capital ratio requirements as stipulated in Sections 3.5.3 and 7.1 of this Guidelines.”
Access Holdings resolved its capitalization issue by completing a N40 billion private placement it shareholders approved last December, Company Secretary Sunday Ekwochi noted in the disclosure.
Its banking subsidiary also met its N500 billion new capitalization requirement through a N351 billion rights issue in December 2024, shooting up its share capital to N600 billion.
The company’s paid up capitalization currently stands at 54.4 billion ordinary shares, compared to UBA’s 44.2 billion shares. The regulator, however, would not approve the former half-year dividend payment.
And the full-year dividend met with disapproval, too, because the company fell short of the provision of Section 19(8)(c) of the Bank and Other Financial Institutions Act (BOFIA 2020). Ekwochi said the section relates to limits of investments in foreign subsidiaries.
BOFIA’s section 19 has only five subsections, and it relates to board appointments. But section 19 (8)c of the CBN Guidelines for Financial Holding Company pegs investment in foreign subsidiaries at 10 percent of shareholders’ fund. And the timeframe for compliance is 12 months.
Access Holdings has five subsidiaries, including insurance, asset management, deposit money banking, payment, and investment, besides the 12 branches it operates in the UK, France, Lebanon, Gambia, Tanzania, and other countries.
Its stakes in these stand at 19.4 percent, Roosevelt Ogbonna, chief executive officer, Access Bank, told Bloomberg early in May.
Admitting the regulator’s concerns in the disclosure, the company listed capitalization, balance sheets, governance and policy frameworks as areas in need of adjustments “to achieve full regulatory alignment within the permitted timeline”.
The last time the company failed to pay a dividend was 2007.
