Access Holdings, the parent company of Access Bank, is preparing to sell at least one foreign subsidiary as it works to comply with a Nigerian banking law that limits how much capital banks can invest in overseas operations.

Chairman Aigboje Aig-Imoukhuede announced that Access Holdings has pinpointed a foreign business it may need to sell because regulatory constraints make it difficult to retain. He did not specify which business or country is involved, and no transaction has been finalised.

The scale of the required adjustment is considerable. Access Bank's investments in its subsidiaries amounted to ₦446.6 billion as of September 30, 2026 — approximately 19.29% of its shareholders' funds, nearly double the 10% ceiling set by the Central Bank of Nigeria (CBN).

Under the Banks and Other Financial Institutions Act (BOFIA) of 2020, Nigerian banks cannot invest more than 10% of their shareholders' funds in foreign subsidiaries unless the CBN approves a different limit. The law does not prohibit banks from operating internationally, but it restricts how much capital they can allocate to those ventures. Because the ceiling is measured against shareholders' funds, a bank's room to fund overseas ventures is directly tied to the size of its capital base.

To align with these regulations, Access Holdings will need to reduce its qualifying foreign investments. That does not mean the group will cease all overseas operations or exit the markets where it is currently present.

The bank is exploring options to sell off selected foreign investments as part of a broader strategy to bring itself into line with the rules ahead of the March 2027 deadline.

During its earnings call on November 5, Access said it plans to repatriate excess capital from subsidiaries in seven countries, mainly across Africa, along with one in its international sector. The group is also looking to sell minority stakes in subsidiaries across five countries while retaining at least 80% ownership in each. In July 2026, it completed the sale of a 7.44% stake in Access Bank Ghana.

Access is additionally restructuring its operations by creating a global subsidiary and an intermediate holding company. These changes are designed to keep the group's investment exposure within the limits set by the Central Bank of Nigeria without it losing control of most of its overseas banking operations.

A sale of an entire foreign business would nonetheless mark a more significant step than divesting minority stakes, and could lead Access to withdraw from certain markets as it evaluates which operations to keep in order to meet its requirements. Unlike the stake sales and capital repatriations already outlined, which trim the group's reported exposure while preserving its presence in each market, a full disposal would remove an operation from the group altogether.

The regulatory constraint also has implications for shareholders. Access has placed its proposed dividend for the full year 2025 on hold until it meets the foreign investment limit, stating that dividend payments will depend on compliance with the regulations and on receiving the necessary approvals. On the company's stated terms, shareholder payouts remain tied to compliance progress through the March 2027 deadline.

For now, Access has not specified which foreign business it might sell or how much such a disposal could help reduce its investment exposure. The company has until March 2027 to bring itself into alignment with the law, and the markers to watch are the identification of the targeted business, any CBN approval attached to a disposal, and completion of the group's broader compliance steps within that window.

Primary source: Bloomberg