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LAGOS, Nov 23 (Reuters) - Nigeria’s central bank has issued the country’s first merchant banking licences in more than a decade to South Africa’s FirstRand and local firm FSDH, it said on Friday.
They are the first since the regulatory distinction between merchant and commercial banking was axed twelve years ago.
Following many Western countries, Nigeria allowed commercial and investment banks to merge their operations in 2000.
But it scrapped this universal banking model two years ago in the wake of a financial crisis that nearly sank nine lenders and forced the central bank to spend $4 billion in a rescue.
The country has now reverted to having a firewall between retail banking and the speculative capital market business.
“We have issued banking licence to Rand Merchant bank Nigeria and FSDH to operate as merchant Bank,” Ugochukwu Okoroafor, the central bank’s director of communication, said.
FirstRand declined to comment on the license while FSDH, which currently runs asset management operations in Nigeria, said it will start merchant banking operations by the first quarter of next year. (Reporting by Chijioke Ohuocha and Oludare Mayowa; Additional rpeorting by Helen Nyambura in Johannesburg; Editing by Tim Cocks)