FBN Holdings Plc has officially opened its Rights Issue, aiming to raise N150 billion.
The offer will see 5.983 billion ordinary shares issued at a price of N25 per share.
This strategic move is designed to bolster the company’s financial position.
The offer is structured so that existing shareholders can purchase one new share for every six shares they currently hold.
The record date for shareholders is set as October 18, 2024.
Mr. Femi Otedola, Chairman of FBN Holdings, elaborated on the purpose of this capital injection.
He stated that the funds will primarily recapitalize the commercial banking arm, First Bank of Nigeria Ltd.
Otedola emphasized the importance of this initiative for future business growth.
He noted that the money raised will enhance automation and digital banking services.
Additionally, it will support First Bank’s expansion strategy across Africa.
Otedola appealed to existing shareholders to seize this opportunity.
He stated, “Your participation will strengthen our group and position First Bank for sustained growth.”
The Group Managing Director, Mr. Nnamdi Okonkwo, echoed Otedola’s call.
He highlighted that the Rights Issue allows shareholders to maintain their stake in the company.
Okonkwo explained that the initiative provides essential capital buffers for upcoming business opportunities.
He stated, “This is a chance for our shareholders to be part of our growth story.”
During the company’s 11th Annual General Meeting on August 15, 2023, shareholders unanimously supported the Rights Issue.
Okonkwo informed shareholders that printed copies of the participation forms are available.
They can be downloaded from the company’s website or at any FirstBank branch.
He added that the application can also be made via the FirstMobile platform.
Shareholders are urged to study the rights circular carefully.
Okonkwo advised, “If in doubt, consult your Stockbrokers and Portfolio Manager.”
Regulatory Changes Prompt Capital Drive
This Rights Issue comes in the wake of new capital requirements set by the Central Bank of Nigeria (CBN).
In March 2024, the CBN announced that tier-1 banks with international licenses must raise their capital from N25 billion to N500 billion.
For national banks, the new requirement is set at N200 billion.
The CBN has given banks a two-year timeline to comply with these new regulations.
Currently, First Bank of Nigeria has a share capital of N251.3 billion.
To meet the CBN’s new requirement, the bank needs to raise up to N248.7 billion.
This N150 billion Rights Issue represents approximately 60% of the capital needed to meet the CBN’s target.
As of now, FBN Holdings shares are trading at N28.75, which is a N3.75 decline from the Rights Issue price.
Market Reactions and Future Outlook
Market analysts view this Rights Issue as a positive step for FBN Holdings.
They believe it will enhance the bank’s ability to compete in a challenging economic landscape.
The Nigerian banking sector has faced numerous challenges in recent years.
These include high inflation rates, currency devaluation, and changing regulatory requirements.
Analysts expect the capital raised will not only strengthen First Bank but also contribute to economic stability.
Otedola’s vision for the bank includes a focus on expanding digital services.
This aligns with global trends in banking, where digital solutions are becoming essential.
Otedola remarked, “Our goal is to create a bank that meets the needs of our customers in today’s digital age.”
First Bank of Nigeria has a rich history, being one of the oldest banks in Nigeria.
Founded in 1894, it has played a significant role in the country’s financial development.
The bank is known for its wide range of banking services for individuals and businesses.
This includes retail banking, corporate banking, and investment services.
