FIRS GRANTS TAX EXEMPTION TO BANKS' HOLDING COMPANIES
Federal Inland Revenue Service (FIRS) has granted tax exemption to bank holding companies to avoid the incidence of double taxation.
Meanwhile, Shareholders of First Bank of Nigeria (FBN) have approved dividend of 80 kobo per share for the operating year ended December 31st 2012.
Addressing shareholders at the 44th annual general meeting of the Bank , Group Managing Director/Chief Executive of the Bank, Mr. Bisi Onasanya disclosed that the formation of a bank holding company, which would serve as parent company to the bank and all its subsidiaries was slowed down by the need to get tax exemption for bank holding companies so that the holding companies would not pay tax on profit for which the subsidiaries have already paid.
He said, 'We have kick started the process. The good news is that the FIRS has released operating circular to clear the issue of double taxation. We are awaiting the Ministry of Finance to officially gazette it. Already we drafted a Scheme of Arrangement for SEC and CBN's approval. Thereafter, we will hold AGM later in the year to seek your approval. We are following due process and we are clearly on course,' he said.
At the meeting, the shareholders also endorsed the plan by the management to set up a HoldCo in line with Central Bank of Nigeria (CBN) directive. Onasanya said the board had decided on a new structure before the CBN directive, stating that the development would benefit the shareholders.
He said that the management decided not to sell off the subsidiaries as they were doing well and could contribute positively to the HoldCo bottom line. He said the bank was following due process to register the new company, noting that shareholders will exchange one for one share in the new holding company.
According to the President, Nigerian Shareholders Solidarity Association (NSSA), Mr. Timothy Adesiyan, the shareholders are impressed with the way the bank is being run, stating that the impressive result posted for the year end was a testimony that the bank was on the right track. He noted that with the impressive 2012 first quarter result released by the bank recently, the shareholders would reap higher dividend in this year end.
In his contribution, General Secretary, Independent Shareholders Association of Nigeria (ISAN), Mr. Adebayo Adeleke, lauded the prudent nature the bank is being run, stating that the performance at the key financial indices was laudable.
In his words:' Our bank has not only been regenerated but also rejuvenated. The board and management must be commended for this. We are also impressed with the dividend paid to us. We believe it could be better.'
On his part, a shareholder, Nonah Awoh, while expressing satisfaction with the result posted, he expressed dissatisfaction over the performance of the bank' shares on the trading floor of the Nigeria Stock Exchange (NSE), advising the management to put on hold further issuance of bonus shares to shareholders.
The financial results of the bank shows that the Group's balance sheet increased by 32 per cent for the year. Total assets were N2.8 trillion and total assets and contingents were over N4.4 trillion.