Access Bank, CBN’s ‘FHC Draft’, and the dividend puzzle

The Central Bank of Nigeria’s (CBN’s) June 2026 draft guideline on Financial Holding Companies has reignited debate around bank dividends, capital buffers, and the structure of banking groups. At the centre of this is Access Bank/Access Holdings, whose management has repeatedly stated that it has resolved all regulatory restrictions except the 10 percent foreign subsidiary investment limit. Understanding the dividend outlook requires separating three distinct issues: structural compliance, forbearance, and CBN verification.

Structural compliance: The 10% rule is resolved

For years, Access Bank Plc breached Section 19(8) of BOFIA, which limits a bank’s investment in foreign subsidiaries to 10 percent of shareholders’ funds. Access expanded aggressively across Africa, and by FY2025 its international operations accounted for 33 percent of loans, 23 percent of shareholders’ funds, and 52 percent of PBT [profit before tax]. At its AGM [annual general meeting], the chairman stated that foreign subsidiaries are now “already sitting at the FHC,” meaning that Access Holdings, not Access Bank Plc, owns them. The June 2026 draft formalizes this by allowing FHCs to hold foreign subs directly and ring-fence the Nigerian bank. Management was also given a 12-month window to remediate the position. By this metric, Access has exited the structural restriction. The comment that “the money to pay is sitting at the FHC” reflects the cash raised from the 2024 rights issue and earnings from non-bank subsidiaries like ARM Pensions and Access Insurance.

2. The forbearance block: Cash, not structure

However, the bigger barrier to dividends was never the 10 percent rule alone. In February 2024, CBN issued a circular suspending dividends, bonuses, and foreign investments for banks under regulatory forbearance until they exited forbearance and were independently verified as compliant. Forbearance allowed banks to classify large ‘Oil & Gas loans’ as “performing” despite stress. When forbearance expired in Q1 2026, peers like United Bank for Africa (UBA), First Bank of Nigeria (FBN), and Ecobank saw NPLs [Non-Performing Loans] jump above 10 percent as those loans were reclassified. Access Bank was the outlier with NPL at 2.5 percent, indicating it had provisioned more aggressively or had a cleaner book. This means Access has technically exited forbearance, removing the primary regulatory block that CBN tied to dividend suspension.

3. The new 20% HoldCo buffer and CBN verification

The June 2026 draft adds a new condition: FHCs must maintain a minimum 20 percent capital buffer above the Nigerian bank’s CAR [capital adequacy ratio]. This buffer must be held at the HoldCo level and cannot be lent back to the bank. It is designed to ensure the HoldCo can absorb shocks from foreign subsidiaries without destabilising the domestic bank. Access Holdings may need additional capital to meet this, but the cash from prior raises suggests it is better positioned than peers. Still, CBN’s last directive remains: dividends are suspended “until such a time as forbearance is fully exited and capital adequacy is independently verified.” Even with forbearance expired and structure fixed, CBN examiners must verify cash provisioning and CAR compliance before lifting the ban. No new circular has done this yet.

4. Implications for Access and shareholders

The dilution and dividend impact differs by bank. Zenith needs minimal capital and will see the least EPS/dividend hit. Access already diluted shareholders in 2024 and faces moderate dilution now, but its low 2.5 percent NPL puts it first in line for dividend resumption. FirstHoldCo and UBA face higher dilution and dividend risk due to larger capital gaps and NPL shocks. Analysts like Renaissance Capital still forecast 2028 for Access to resume dividends, but that assumes slow provisioning. With forbearance expired and NPL at 2.5 percent, Access could be approved earlier if CBN verification is swift.

Conclusion 

Access Bank has solved the structural problem: foreign subsidiaries are at the HoldCo and the 10 percent rule is resolved by the new draft. It has also solved the asset quality problem: forbearance expired and NPL is lowest among FUGAZ. What remains is CBN’s verification of cash capital and provisioning. The chairman and the managing director are correct that the money exists at HoldCo, but CBN rules prevent the bank from upstreaming dividends until formal sign-off. Once CBN confirms compliance, Access Bank Nigeria can pay dividends to Access Holdings, which can then pay shareholders. The timeline is now in CBN’s hands, and Access is best positioned among its peers to be the first to resume payouts.

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Michael Ogbonna