By Michael Eboh
Shareholders of  Fidelity Bank Plc have given approval to the bank’s decision to divest from its two subsidiaries and also for it to obtain an international commercial banking licence.

This is in a bid to comply with the directive of the Central Bank of Nigeria (CBN), concerning the abolition of Universal Banking.

The shareholders, at the bank’s Extra-ordinary General Meeting (EGM), in Lagos, Thursday, gave Directors of the bank the nod to enter into agreements, undertakings, arrangements in the process of obtaining the license and in the course of achieving the divestment objective

According to the resolution put forward to the shareholders, the bank asked that it be given the approval, subject to the ratification of the regulatory authorities, to carry on banking business and operate as a commercial bank and that the Board of Directors be authorised to apply to the Central Bank of Nigeria (CBN).

In addition, the shareholders also gave Directors of the bank the approval to divest from its non-banking subsidiaries, through such means as transfer, auction, direct sale, distribution in specie or such other divestment mechanism that will be beneficial to the bank.

Chairman of the bank, Chief Christopher Ezeh, explained that the decision of the bank to divest from its subsidiaries is borne out of the desire to enable it fully concentrate on its core commercial banking activities.

He noted that the bank chose the divestment option due to the numerous challenges and problems associated with a holding company option.

According to him, the bank considered the various options available to it and discovered that the divestment option is better, considering the size of the subsidiaries and its insignificant effect on its activities.

He said, “The Directors have reviewed the unfolding economy and banking environment, our strengths as a business, and the strategic benefits of our non-banking financial services subsidiaries to building our banking business, and the contribution of the subsidiaries to the group.

“The Board has also held extensive discussions on the strategic implications of the new rules of engagement for our long term core business objectives; how to meet the requirements of the new banking model; and the implications for our banking business and the subsidiaries the Fidelity Group.

“Your Directors are of the opinion that the most effective way to ensure compliance and at the same time realise our growth potentials and unlock value for our shareholders, is to concentrate on commercial banking, the crux of our strength.