Fitch Ratings has cautioned that the Central Bank of Nigeria's proposed regulatory framework for Bank Holding Companies could trigger widespread organisational restructuring in the domestic banking industry if adopted in its current form.
The assessment appears in the agency's report titled "African Banking Groups' Cross-Border Expansion to Continue," published on September 14, 2026. The publication reviewed the expansion strategies of leading African banking groups and considered the likely consequences of the CBN's draft rules for financial holding companies.
Fitch explained that many African banking groups operate through a model in which a bank holding company directly owns the domestic banking subsidiary, foreign banking operations, and non-bank financial services businesses. In that structure, the holding company is generally supervised on a consolidated basis and faces capital and liquidity obligations similar to those applied to the banking subsidiary.
Nigerian and Moroccan banking groups, however, currently follow a different arrangement. "Nigerian and Moroccan banking groups have a different structure, with the domestic banking entity having shareholdings in the foreign banking subsidiaries," Fitch stated.
The proposed draft regulations would allow BHCs to hold direct or indirect equity interests in foreign subsidiaries through an intermediary holding company, marking a departure from the structure many Nigerian groups use today. "Fitch believes that, if effected, these regulations could prompt several organisational restructurings," the report noted.
The CBN recently issued an exposure draft seeking to revise the licensing and supervisory framework for Financial Holding Companies. An FHC is a non-operating parent entity that holds stakes in multiple financial services businesses, including at least one bank, and provides strategic oversight without conducting banking activities itself. A central proposed change concerns offshore subsidiaries: Nigerian banks may currently own foreign subsidiaries directly, but the new framework would require such subsidiaries to be held by the holding company or through an intermediate holding company.
The reforms form part of the CBN's broader push to strengthen corporate governance, ring-fence risks within banking groups, and reinforce the separation between holding companies and their operating subsidiaries.
