First HoldCo Plc’s recent announcement that it has completed the divestment of its entire stake in FBNQuest Merchant Bank Limited marks a significant turning point for the company and reflects broader trends in Nigeria’s financial services industry. The move, finalised following regulatory approvals, effectively transfers ownership and operational control of the merchant bank to EverQuest Acquisition LLP, a consortium of investors.
This decision is part of a strategic restructuring plan by First HoldCo to concentrate on its core commercial banking business, strengthen capital allocation, and reduce regulatory and operational burdens associated with non-core units. By stepping away from the merchant banking arm, which accounted for a relatively small share of overall earnings, the group aims to sharpen its competitive edge in areas with stronger growth prospects.
First HoldCo’s leadership made clear that this divestment aligns with its long-term objectives. Chairman Femi Otedola described the move as consistent with the company’s strategy to improve performance and drive sustainable growth. The Board also highlighted that resources freed up through the sale will help strengthen the capital base of FirstBank, the group’s flagship commercial bank.
“By divesting from the merchant banking business, we are reallocating resources to strengthen our commercial banking operations and drive growth across the Group,” said the Group Managing Director, Wale Oyedeji. He emphasised that this repositioning would allow the group to focus more effectively on executing its objectives and reinforcing market leadership.
Under the new ownership of EverQuest, FBNQuest Merchant Bank known for corporate advisory, structured finance, and specialist investment products is expected to pursue a more expansion-oriented strategy tailored to its strengths and market niche. This shift is likely to influence competition within Nigeria’s merchant banking landscape, enabling mid-tier players to gain stronger footholds.
The divestment also aligns with directives from regulatory authorities urging Nigerian banks to streamline operations, recapitalise, and enhance capital efficiency. In line with this, the sale decreases the regulatory capital burden on First HoldCo and allows heightened focus on high-impact business units, a key priority amid ongoing economic challenges in Nigeria’s financial sector.
Importantly, the divestment does not affect the group’s other subsidiaries such as asset management, trusteeship, and securities brokerage arms, which remain integral to First HoldCo’s strategic framework. These units continue to contribute to the company’s diversified portfolio of financial services.
From an economic standpoint, this divestment could have meaningful implications: By focusing capital and managerial attention on core banking operations, First HoldCo may improve credit flow to businesses and consumers, potentially supporting economic activity and financial intermediation in Nigeria’s challenging economic environment.
