Fidelity Bank Now To Raise N127.1bn Fresh Capital Via Rights, Subscription

  • Announces Downward Review Of Offer Prices

The b oard of Fidelity Bank Plc, on Wednesday said it now plans to raise N127.1bn, instead of the earlier announced N132bn by way of rights and offer for subscription for which it has received regulatory the required nod from the Securities & Exchange Commission (SEC).

In a notice to the Nigerian Exchange through the NGX Regulations Limited (NGX RegCo), the bank announced the down revision of its proposed rights issue price for its 3.2bn ordinary shares of 50 kobo each at N10 per share to N9.25. The rights issue which is still based on one new ordinary share for every 10 held by shareholders as of the close of business on Friday, January 5, translates to a new offer size of N29.6bn, instead of N32bn.

Also, its offer for subscription of 10bn ordinary shares at N10 each was repriced to N9.75 each, amounting to N97.5bn, down from the previous N100bn.

Further details including dates, purpose and parties to the offers are expected in the coming days.

The Central Bank of Nigeria (CBN), had in a statement by Mrs. Hakama Sidi Alli, its acting Director, Corporate Communications, noted on Monday that the various banks “have begun submitting implementation plans for the Banking Sector Recapitalisation Programme in compliance with the CBN Circular reviewing the minimum capital requirements for Commercial, Merchant, and Non-Interest Banks (CMNIBs).”

Justifying the recapitalisation of Nigerian banks, the statement said it will also enhance their “buffers to withstand economic shocks, this proactive measure by the CBN to require CMNIBs to recapitalize will result in increased capital for Nigeria’s banks, enabling them to provide much-needed credit to critical sectors of the economy.”

This, it stressed, “will increase the financial system’s contribution to the growth and development of a $1tr Nigerian economy, even as it reassured all stakeholders of its unwavering commitment to ensuring the financial system’s stability.

Recall that the CBN had last year directed banks in the country to raise their capital base by as much as over 100% in most cases.

While banks with international operations are required to raise their capital to a minimum of N500bn, for example; national banks have a new minimum requirement of N200bn; regional banks, N50bn, just like merchant banks. The CBN also set a new N20bn minimum for non-interest banks operating nationally; and N10bn for those operating regionally.

To achieve the new minimum, the banks are expected to adopt one or a combination of three options: inject fresh equity capital through private placement, rights issue and/or offer for subscription; mergers and acquisition and/or upgrade or downgrade of licence of authorisation from international bank to national or regional or reverse.