The Central Bank of Nigeria (CBN) has reaffirmed its commitment to maintaining a transparent and resilient financial system by reinforcing regulatory compliance and risk management across the country’s financial institutions.

Speaking at a high-level Mandatory Compliance and Anti-Money Laundering (AML) Training Workshop held in collaboration with Citi, on Friday, in Lagos, Special Adviser to the CBN Governor on Compliance, Shola Phillips, emphasised the need for strict adherence to global banking standards to sustain confidence in the nation’s financial sector.

“Regulators expect financial institutions to maintain dynamic, risk-based AML/Combating the Financing of Terrorism (CFT) programmes that are responsive to the evolving financial environment.

“Proactive engagement with regulatory developments and the integration of innovative compliance solutions are essential for institutions to meet these expectations effectively,” Phillips stated.

The training, attended by compliance officers, trade operations specialists, and correspondent banking teams from various financial institutions, provided critical insights into global regulatory trends, emerging financial risks, and strategies for sustaining correspondent banking relationships.

In her remarks, Siobhan Ni Ealaithe, Managing Director of Citi’s Correspondent Banking Group, highlighted the critical role of robust governance frameworks in mitigating risks.

She underscored the necessity of Know Your Customer (KYC), Know Your Business (KYB), and Know Your Transaction (KYT) protocols in preventing illicit financial activities.

Stephanie Bailey, Head of EMEA AML Risk Management for Foreign Correspondent Banking, provided a blunt assessment of financial crime risks, noting that over $3 trillion in illicit funds flow through the global financial system annually.

She urged financial institutions to strengthen due diligence measures, leverage technology-driven risk assessments, and uphold transparency in all transactions.

According to a statement issued by the apex bank, the workshop aligns with CBN Governor Olayemi Cardoso’s vision to uphold regulatory excellence and strengthen Nigeria’s financial system.

The statement said: “As Governor Cardoso has consistently emphasised, ‘A strong financial system is built on trust, and trust is earned through integrity and compliance.

“The CBN will continue to set high regulatory standards to protect Nigeria’s financial ecosystem and ensure its alignment with global best practices.’

“By fostering a strong culture of compliance and strengthening risk management frameworks, the CBN aims to safeguard Nigeria’s financial sector while ensuring its resilience and credibility locally and globally.”

Foreign investors withdrew N45.85bn from the Nigerian stock market in January 2025, an outflow that significantly overshadowed the N25.66bn recorded as foreign inflows within the same period.

The latest Nigerian Exchange Domestic and Foreign Portfolio Investment Report revealed that foreign outflows accounted for 64.12 per cent of total foreign transactions on the exchange, reinforcing concerns over declining foreign participation in the market despite the relative stability of the naira.

It showed that total foreign transactions increased by 7.13 per cent, rising from N66.75bn in December 2024 to N71.51bn in January 2025.

However, this increase was largely driven by investors liquidating their holdings, as evidenced by the much larger outflow compared to inflows.

This trend indicates that while some foreign investors may still engage with the Nigerian market, a greater proportion opt to exit, contributing to capital flight.

The withdrawal of foreign funds from the market came amid a 9.89 per cent decline in total equity transactions on the NGX, which fell from N673.66bn in December 2024 to N607.05bn in January 2025.

On a year-on-year basis, total transactions dropped by 6.83 per cent from N651.52bn recorded in January 2024.

This suggests that investor sentiment remained subdued as both foreign and domestic players exercised caution in response to prevailing economic conditions.

The report read, “On a monthly basis, Nigerian Exchange Limited polls trading figures from market operators on their Domestic and Foreign Portfolio Investment flows.

“As at 31 January 2025, total transactions at the nation’s bourse decreased by 9.89 per cent from N673.66bn (about $438.64m) in December3 2024 to N607.05bn (about $410.84m) in January 2025.

“The performance of the current month when compared to the performance in January 2024 (N651.52bn) revealed that total transactions decreased by 6.83 per cent. In January 2025, the total value of transactions executed by Domestic Investors outperformed transactions executed by Foreign Investors by circa 76 per cent.”

The report further disclosed that foreign investors’ share of total market transactions stood at 11.78 per cent, with domestic investors dominating with 88.22 per cent.

This represents a slight increase from 9.91 per cent foreign participation in December 2024 but remains far below historical averages when foreign investors played a more substantial role in market liquidity and depth.

The disparity between inflows and outflows further highlights the persistent reluctance of foreign investors to commit fresh funds to Nigerian equities.

A closer look at domestic transactions revealed a notable shift in investor behaviour. Institutional investors, who traditionally drive market stability, significantly reduced their participation, with transactions falling by 33.95 per cent from N406.04bn in December 2024 to N268.19bn in January 2025.

This decline contrasts sharply with the retail segment, which saw a 33.10 per cent increase, as retail transactions rose from N200.87bn to N267.35bn within the same period.

This shift suggests that while institutional investors remain cautious, retail investors are showing increased enthusiasm, possibly seeking bargain opportunities in a market where valuations may appear attractive.

Despite concerns over foreign outflows, the exchange rate showed signs of stability, with the naira appreciating from N1,535.81/$ in December 2024 to N1,478.22/$ in January 2025.

This stability, however, was not sufficient to reverse foreign investor sentiment, as broader macroeconomic challenges persist.

The NGX report also provided a broader historical context, showing that over an 18-year period, domestic transactions increased by 33.15 per cent from N3.556tn in 2007 to N4.735tn in 2024, while foreign transactions grew by 38.31 per cent, from N616bn to N852bn over the same period.

However, foreign participation has steadily declined in recent years, with foreign investors accounting for only 15 per cent of total transactions in 2024, while domestic investors controlled 85 per cent of the market.

There is a need for foreign investors to increase their stake in Nigerian equities and for more stable macroeconomic policies, improved market transparency, and strengthened investor confidence.

However, the Central Bank of Nigeria’s monetary tightening policies, designed to curb inflation and stabilise the naira, are gradually boosting renewed foreign interest in the equity market.

By A.Ezekiel

In a world where approximately 20% of new businesses fail within the first two years, 45% within five years, 65% within ten years, and only 25% make it to 15 years or more (according to the US Bureau of Statistics), any business that has crossed 15 years should be sharing insights on survival and success.

But what about businesses that have lasted twice that long? Or a financial services group that has thrived for over 130 years, especially in Africa, where business survival rates are likely lower than those statistics from the Global North? Such a group has certainly earned the right to teach masterclasses on business longevity.

First HoldCo Plc (FirstHoldCo), recently rebranded from FBN Holdings Plc, exemplifies sustainable business practices. A well-diversified group, it is one of Africa’s largest financial services organisations, offering innovative financial solutions through its subsidiaries in commercial banking, asset management, capital markets, securities, trusteeship, and insurance brokerage. FirstHoldCo ensures strategic coordination and synergy among its subsidiaries to deliver long-term value for stakeholders.

Retaining the legacy strengths and experience of FBN Holdings Plc, FirstHoldCo ensures that its subsidiaries enhance positive environmental, social, and governance (ESG) impacts while minimising or eliminating negative ones. This includes managing ESG risks in the workplace, marketplace, community, and environment, with the institutional capability to turn risks into opportunities.

For example, ESG risk management enhances credit and investment decision-making, de-risking processes for subsidiaries such as FirstBank and FBNQuest. It also strengthens social relationships with the communities in which these subsidiaries operate.

ESG and sustainability may be buzzwords for some corporations seeking to appear politically correct, but at FirstHoldCo, they are integral to its identity. The company is self-driven in aligning its strategy and operations with ESG principles and setting new sustainability benchmarks for financial services in Nigeria.

FirstHoldCo’ s flagship subsidiaries, FirstBank and FBNQuest, integrate ESG risks into their products, services, and offerings from the ideation stage through to development and launch. This approach drives responsible lending and investment practices, enabling the group to leverage ESG market opportunities while promoting sustainable socio-economic growth.

FirstHoldCo also prioritises people empowerment, fostering a work environment rooted in equal opportunities, diversity, and inclusion. A notable achievement is bridging the diversity gap, reaching a 40% female to 60% male employee ratio in 2023, one year ahead of its 2024 target.

The group also supports the communities where its subsidiaries operate, ensuring its impact resonates positively. Since 2017, it has implemented the SPARK (Start Performing Acts of Random Kindness) initiative and Corporate Responsibility and Sustainability (CR&S) Week. In 2023, these initiatives impacted 60,000 lives through outreaches to 60 orphanages, 20 schools, and hospitals across Nigeria, Ghana, Senegal, The Gambia, the Democratic Republic of Congo, Sierra Leone, and the United Kingdom. Donations included consumables, computers, clean water projects, school renovations, wheelchairs, and cash. Employees committed over 27,000 volunteer hours to these initiatives.

In 2023, FirstBank reinforced its commitment to empowering women through FirstGem, a financial product supporting women-led businesses. Over N36 billion in loans were disbursed at a single-digit interest rate of 9%. Additionally, its Agency Banking business, FirstMonie, expanded its female agent network to over 55,000.

Inclusion remains a key focus, with FirstBank enhancing accessibility for physically challenged customers in 234 locations, making 25 branches fully accessible and improving access at 209 others. It also expanded the SPARK initiative to institutions like the Bethesda School of the Blind and the Down Syndrome Foundation in Lagos.

FirstBank operates an Environmental, Social, and Governance Management System (ESGMS) to drive responsible lending and minimize ESG risks. In 2023, this system was enhanced to ensure real-time transparency in corporate credit screenings. That year, 2,239 credit transactions worth N4.236 trillion were assessed for ESG risks.

To strengthen ESG compliance, FirstBank collaborates with development partners such as British International Investment, the African Development Bank, the International Finance Corporation (IFC), and Proparco, a French development finance institution. Its partnership with Proparco is crucial for integrating climate initiatives into business strategy. This project enhances its understanding of financed emissions and positions it for climate financing and investment opportunities.

This initiative will help FirstBank reduce greenhouse gas (GHG) emissions, mitigate exposure to physical and transition risks, and strengthen climate adaptation efforts. It also reinforces its market competitiveness as an ESG leader committed to a low-carbon economy.

As part of its commitment to decarbonisation, FirstHoldCo’ s FirstBank actively engages in reforestation and afforestation through partnerships focused on carbon dioxide (CO2) removal. In 2023, it pledged to plant 50,000 trees by 2025 in collaboration with the Nigerian Conservation Foundation (NCF). That year, it planted 1,000 trees at the Lekki Conservation Centre, Lagos; Model Secondary School, Maitama, Abuja; and Federal Government Girls College, Calabar. By the following year, it had planted an additional 30,000 trees, bringing the total to 31,000.

FirstBank also drives thought leadership in climate finance, promoting knowledge on carbon mitigation and climate adaptation. A notable effort was a webinar themed ‘Harnessing Climate Finance Opportunities in Nigeria,’ held in partnership with the Sustainability Practitioners Institute of Nigeria (SPIN). The event featured prominent ESG and sustainability experts such as Professor Kenneth Amaeshi, Dr. Muntaqa Umaru-Sadiq, and Carina Dunker, underscoring FirstBank’s commitment to advancing climate finance discussions.

With so much achieved and ongoing ESG/sustainability initiatives, what is the greatest impact of ESG at FirstHoldCo?

For the group, it is the net positive effect on the communities where its subsidiaries operate. For individuals, it is the tangible benefits from its financial solutions and CSR initiatives. For businesses, it is the sustainable practices FirstHoldCo champions, setting a standard for responsible corporate leadership