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The fresh capital raised by Nigerian banks is set to hit about N2.99tn if the second tranche of the recapitalisation materialises, The PUNCH can report.
In November 2024, it was revealed that about N1.7tn had been raised by banks since the commencement of the recapitalisation as directed by the Central Bank of Nigeria.
Speaking on the sidelines of the last annual Chartered Institute of Stockbrokers Conference, the SEC Director-General of the Securities and Exchange Commission, Dr Emomotimi Agama, said about N1.68tn has been raised by banks through e-offering in the bank recapitalisation exercise. He disclosed that the amount was raised in 12 applications by nine banks and that technology is an enabler in the capital market and a prime tool for growth.
Out of the lenders in the first round of the recapitalisation exercise, five of them have raised N1.14tn. They include Access Holdings Plc, which raised N351bn and has exceeded its required capital base; Zenith Bank, which raised N350.4bn, also to surpass the CBN capital threshold; Guaranty Trust Holding Company, which raised N209.41bn; FCMB, which got N147.5bn; and Sterling Bank and non-interest bank Jaiz Bank, which raised N75bn and N10.04bn, respectively, via private placement.
As of Tuesday, the additional shares from the capital-raising activities by Access Holdings Plc, Guaranty Trust Holding Company Plc, FCMB Group Plc, and Jaiz Bank have been successfully listed on the NGX.
Disclosures from the regulatory arm of the exchange, NGX RegCo, revealed that the Access Holdings Rights Issue of 17,772,612,811 ordinary shares of 50 Kobo each at N19.75 per share has been listed on the Daily Official Lists of the NGX. With this listing of the additional 17,772,612,811 ordinary shares, the total issued and fully paid-up shares of Access Holdings have now increased from 35,545,225,622 to 53,317,838,433 ordinary shares of 50 Kobo each.
An additional 4,705,800,290 ordinary shares of 50 Kobo each of Guaranty Trust Holding Company Plc have also been listed on the NGX. With the listing of the additional 4,705,800,290 ordinary shares, the total issued and fully paid-up shares of Guaranty Trust Holding Company Plc have now increased from 29,431,179,224 to 34,136,979,514 ordinary shares of 50 Kobo each.
For FCMB, trading license holders were notified of the additional 19,802,710,781 ordinary shares of 50 Kobo each of FCMB Group Plc listed on the Daily Official List of the NGX last Thursday. The additional shares listed on NGX arose from FCMB Group Plc’s Public Offer of 15,197,289,219 ordinary shares of 50 Kobo each at N7.30 per share (the offer was 130.30% subscribed). With the listing of the additional 19,802,710,781 ordinary shares, the total issued and fully paid-up shares of FCMB Group Plc have now increased from 19,802,710,754 to 39,605,421,535 ordinary shares of 50 Kobo each.
Non-interest bank, Jaiz Bank had its additional shares arising from a private placement of 10,048,237,955 ordinary shares of 50 Kobo each at N1.00 per share listed on the exchange. With the listing of the additional 10,048,237,955 ordinary shares, the total issued and fully paid-up shares of the bank have now increased from 34,541,172,377 to 44,589,410,332 ordinary shares of 50 Kobo each.
As the second round of capital-raising exercise kicks off, four banks have revealed that they would be looking to raise about N931.91bn in fresh capital to meet the new capital base required for banks operating in Nigeria. These include national lenders like Wema Bank and Stanbic IBTC Holdings. Others have international authorisation, like FCMB Group and Fidelity Bank.
Wema Bank recently announced that it would be raising N200bn through a combination of a rights issue and a special placement exercise set to go live on April 1, 2025. Stanbic IBTC Holdings is in the middle of a N148.7bn rights issue and said that the majority of the proceeds would go towards recapitalising its banking subsidiary, Stanbic IBTC Bank.
At its extraordinary virtual general meeting, shareholders of FCMB resolved to increase the authorised additional capital raise of the company from N150bn to N340bn, and Fidelity Bank, the first to test the waters of the capital market to raise funds in mid-2024 and looks likely to return to the market to raise about N243.19bn to maintain its international license.
Also, tier-1 lenders, United Bank for Africa and FBN Holdings, aimed to raise about N239.4bn and N150bn from their rights issues. While the rights issues have been completed, they are undergoing a regulatory process.
Meanwhile, Nigeria’s banking sector recorded a strong start to the year, with the NGX Banking Index surging by 9.76 per cent in January, significantly outperforming the broader market, according to a corporate report obtained from the Nigerian Exchange Group on Tuesday.
The rally was fuelled by increased investor confidence amid the ongoing recapitalisation exercise. NGX noted that the banking sector’s stellar performance in January was driven by strong demand for financial stocks.
The NGX Banking Index posted a 9.76 per cent year-to-date gain, significantly outpacing the NGX All-Share Index, which rose just 1.53 per cent within the same period.
In specific terms, Wema Bank Plc led the gainers with a 25.8 per cent increase, pushing its share price from N9.10 to N11.45. FCMB Group Plc followed with a 17.55 per cent rise, closing at N11.05 from N9.40, while Stanbic IBTC Holdings gained 11.71 per cent, moving from N57.60 to N64.35 per share.
The gains were underpinned by strong financial results, with Wema Bank, FCMB Group, and Stanbic IBTC Holdings reporting significant profit growth in their full-year 2024 earnings.
Afrinvest, in their monthly macroeconomic update, hinged the performance of the banking index on price uptick in Zenith Bank (+11.2 per cent) and Fidelity Bank (+11.1 per cent).
The Central Bank of Nigeria’s recapitalisation directive, which mandates banks to meet new minimum capital requirements by March 2026, has been a key driver of market sentiment.
Under the new guidelines, commercial banks with international licenses must hold N500bn in capital, while national commercial banks require N200bn. Regional commercial and merchant banks must meet an N50bn threshold.
Three banks have already met the new capital requirements, while seven others raised funds through public offers in 2024, with many experiencing oversubscriptions.
Speaking on the recapitalisation drive, the Managing Director of Globalview Capital Limited, Aruna Kebira, stated that the current market performance reflects strong investor appetite for banking stocks.
He added that with N1.7tn already raised, banks are well on track to meet the recapitalisation deadline without the forced mergers seen in 2004.
With investor sentiment remaining bullish, analysts predict that the NGX Banking Index will continue to outperform the broader market as more banks announce their financial results and recapitalisation plans.
The Managing Director of Arthur Steven Asset Management, Olatunde Amolegbe, highlighted that the sector’s fundamentals remain strong and will likely sustain the current growth momentum.
He stated that recapitalised banks will be stronger, more profitable, and better positioned to deliver higher shareholder returns, adding that the sector remains one of the most attractive investment options in 2025.
“As Nigeria’s banking industry moves towards compliance with the CBN’s new capital framework, the ongoing recapitalisation drive is expected to deepen market liquidity, enhance financial stability, and sustain long-term growth in the sector,” Amolegbe said.
