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First Bank sells subsidiary to Botswana firm

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FBN Holdings Plc has reached agreement to sell its microfinance subsidiary-FBN Microfinance Bank Limited, to Letshego Holdings Limited of Botswana. FBN Holdings is the holding company for First Bank of Nigeria and its former subsidiary.

In a statement at the weekend signed by the company secretary, Tijjani Borodo and head of finance, Oyewale Ariyibi, FBN Holdings stated that it has obtained the requisite approval from the Central Bank of Nigeria (CBN) for its divestment from FBN Microfinance Bank.

FBN Holdings stated that it has executed Sale Purchase Agreement (SPA) with Letshego Holdings Limited to sell its shares in FBN Microfinance Bank to Letshego Holdings.

Letshego, a Botswana company, is a holding company with consumer and micro lending subsidiaries across nine countries in Southern and East Africa including Botswana, Kenya, Lesotho, Mozambique, Namibia, Rwanda, Swaziland, Tanzania and Uganda.

In a notice to its shareholders, Letshego had indicated that it was acquiring 100 per cent shareholding in FBN MFB.

Read also: TSA fine: First Bank, UBA lobby CBN

“We expect that the sale will be concluded before the end of the current financial year,” FBN Holdings stated. FBN Holdings’ business year ends on December 31.

Letshego Holdings Limited is a microfinance holding company with its headquarters in Gaborone, Botswana. It was incorporated in March 4, 1998 as Micro Provident Botswana Limited. After a successful initial public offering, Letshego, which derived its name from a Setswana word meaning “support”, was quoted on the Botswana Stock Exchange (BSE) in 2002. It is the third largest company on the BSE.

The company however noted that the acquisition of FBN MFB and another 75 per cent stake acquisition in Tanzania heralded its entry into the non-payroll financial services industry, which will introduce it to increased risk, higher operational costs and an increased likelihood of impairments.

Managing Director, Letshego Holdings Limited, Mr. Chris Low said the company had made a specific investment in risk management in the first half of this year in recognition of the fact that its operations will be migrating from a low risk payroll system to risky activities around deposit taking.

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