Why We Sold FBNQuest Merchant Bank —FBN Holdings

FBN Holdings Plc on Tuesday explained the rationale behind the sale of it merchant banking business to EverQuest Acquisition LLP.

The Holding company also listed its other entities and businesses not included in the sale.

Adewale Arogundade, acting company secretary of the Holdings, made the clarification in a notification sent to the Nigerian Exchange Ltd.(NGX) in Lagos.

A divestment involves a company selling off a full or partial stake of its assets through sale, exchange, closure, or bankruptcy, often to improve the company’s value and obtain higher efficiency.

Many companies use divestment to sell off peripheral assets, enabling their management teams to regain sharper focus on the core business.

FBN Holdings had, on Friday, informed the NGX of the sale of a 100 per cent equity stake in its wholly-owned subsidiary, FBNQuest Merchant Bank Ltd., to EverQuest Acquisition LLP.

It said the sale and purchase agreement, which aligns with its strategy to optimise its portfolio within the group, was subject to approvals from the relevant regulatory authorities.

Arogundade said that the divestment pertains solely to FBNQuest Merchant Bank and has no impact on the continued operations or strategic positioning of other subsidiaries within the group.

“We wish to clarify that all other entities and businesses listed below are not included in the divestment and they remain subsidiaries of FBN Holding and are well integrated into the group’s strategic focus.

“These entities are: FBNQuest Capital Ltd., FBNQuest Asset Management Ltd., FBNQuest Trustees Ltd., FBNQuest Funds Ltd., and FBNQuest Securities Ltd.,” he said.

FBN Quest’s services include corporate and investment banking, investment management, wealth advisory, and fixed-income securities trading.

The “sale is in alignment with the company’s strategy to optimise its portfolio within the group,” FBN Holdings said in a regulatory filing published by the Nigerian Exchange.

“Following a competitive bid Process, EverQuest acquisition LLP (comprising Custodian Investments PLC, Aion Investments and Evercorp Industries) was selected as the preferred bidder,” it added.

The share sale deal requires the approvals of regulators before it can be closed.

FBN Quest reported a net profit of N13 billion for the financial year 2023, contributing 4.2 per cent to the bottom line of the group.

It’s total assets as of the end of last year stood at N361 billion according to the audited earnings report of FBN Holdings for 2023, up from N302 billion a year earlier.

FBN Quest Merchant Bank, formerly FBN Merchant Bank Limited, was incorporated as a limited liability company in February 1995. It was originally known as Kakawa Discount House Limited.

It received a license to operate the business of a discount house and started operations in November 1995.

FBN Holdings acquired the entire equity of the company and transformed it into a merchant bank after getting approval from the Central Bank of Nigeria for merchant banking operations in 2015.

In 2020, South Africa’s Sanlam Group purchased FBN Holdings 65 per cent interest in FBN Insurance Limited, giving the acquirer a 100 per cent ownership of the entity and its subsidiary, FBN General Insurance Limited.