FBN Holdings says it plans to attain a N730 billion capital base by the first quarter of 2025, thereby exceeding the Central Bank of Nigeria’s minimum recapitalisation requirement of N500 billion.
This was announced by the Group Managing Director, FBN Holdings, Nnamdi Okonkwo, during the Group’s ‘Facts Behind the N150 billion Rights Issue” presentation at the Nigerian Exchange Limited.
Okonkwo who stated that the Group’s capital base currently at N230 billion will be bolstered through its ongoing Rights Issue and subsequent capital raising strategies, said that the company plans to recapitalise its commercial banking subsidiary, First Bank of Nigeria Limited.
“This initial phase is all about securing N150 billion through our Rights Issue by offering of 5.98 billion ordinary shares of 50 kobo each at N25.00 per share to existing shareholder on the basis of one new ordinary share for every six ordinary shares held as at October 18, 2024.”
He further revealed that FBN Holdings will seek shareholder approval to raise an additional N350 billion at the upcoming Annual General Meeting, ultimately reaching the N730 billion capital target by early 2025.
“When we are done, we will be over N230 billion higher than the regulator-stipulated capital.”
Highlighting the use of the proceeds from the rights issue, Okonkwo stated that it will be channelled into strengthening the operations of FirstBank, as well as financing digital banking expansion, automation, and investments across its international branches.
“The bank also plans to deepen its footprint in strategic markets, including key African economies and its existing presence in the United Kingdom, France, and China. The infusion of capital allows us to be more competitive on a global scale and reinforces our commitment to innovative, customer-centric services,” Okonkwo said.
FBN Holdings’ diversification strategy was also highlighted, with a focus on enhancing synergy across its subsidiaries and leveraging its stronghold in commercial and merchant banking, asset management, insurance brokerage, and other financial services.
The Group Managing Director addressed the decision to divest from merchant banking through FBN Quest, citing a strategic reorientation that would enable the group to focus on more profitable, scalable ventures.
“Our diversified portfolio provides a buffer; if something goes wrong on one side, there’s support from another,” he said.
He also emphasised the strategic importance of the rights issue, stating, “We will be leveraging our diversified portfolio of businesses and shared resources to ‘do more with less’, optimising costs, improving efficiency, and boosting revenues. We aim to strategically expand into new geographies via both physical and digital approaches while continuing to explore attractive business adjacencies.”
According to Okonkwo, the right issue price of N25 per share offers current shareholders a compelling investment opportunity, as the rights issue price is set at a discount to the current market value.
Fresh Capital
The Chief Executive Officer, Nigerian Exchange Limited, Mr. Jude Chiemeka said the Exchange remains committed to provide a platform for listed corporates to raise fresh capital.
He disclosed Year-till-Date, the Exchange has been able to facilitate N5.7 trillion across different asset classes, stressing that the financial services sector plays an important role in the Nigeria capital market.
“Between 2019 to 2024, this sector has traded over N8 trillion worth of securities in our equities market and 51 per cent is largely attributable to the financial services sector. We think with the important financial service sector plays in the economy, particularly job creations, we are glad to assist the financial services sector around their capital raising exercise.”
Temi Popoola, Group Managing Director/Chief Executive Officer of NGX Group, highlighted the platform’s significance, saying, “NGX Invest’s secure and well-regulated infrastructure has rapidly emerged as the top choice for issuers seeking to distribute their offerings digitally. We are proud to support financial institutions and other issuers in their capital-raising efforts, empowering them to reach a wider investor base and drive economic growth.”
FBN Holdings joins six other Nigerian banks that have recently tapped into this innovative platform to distribute a total of eight public offers and rights issues.
This move aligns with the Central Bank of Nigeria’s new capital adequacy requirements, which mandates banks to strengthen their capital base by 2026.
To date, NGX Invest has facilitated approximately ₦1.26 trillion (about $770 million) in capital raises within the banking sector.
Hauwa Abu
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