Afrigather FBN Holdings, the dad or mum firm of Nigeria’s oldest financial institution, flagged off its ₦150 billion rights subject on Wednesday. Whereas the Central Financial institution elevated capital necessities for the nation’s largest banks tenfold in March 2024, Nnamdi Okonkwo, FBN Holdings’ GMD, mentioned the financial institution’s capital increase plan commenced in 2023.
“We knew the sort of firepower we would have liked, and we determined to do ₦150 billion subject. Subsequently, at our subsequent AGM, we’ll apply to boost one other ₦350 billion,” Okonkwo mentioned in a presentation on the Nigeria Alternate Restricted (NGX) flooring.
The financial institution will promote 5,982,548,799 shares of fifty kobo every to its shareholders at ₦25.00 per share. The rights subject will shut on December 12, 2024.
“We have now ₦270 billion and the CBN says, go as much as ₦500 billion. We’re presently doing ₦150 billion and at our subsequent AGM, we’ll be asking for shareholders’ approval to do one other ₦300 billion once we are achieved, we’ll then have ₦730 billion in capital. Which means we’ll be ₦230 billion larger than the regulator’s stipulated capital,” Okonkwo mentioned.
FBN Holdings is the fourth tier-1 banking group to launch a capital increase to satisfy capital necessities, becoming a member of Warranty Belief Holding Firm GTCO, Entry Holdings, and Zenith Financial institution Plc. 5 of Nigeria’s largest banks raised a complete of ₦1.26 trillion, Bloomberg reported.
Whereas its capital increase comes amid rising inflation, FBN Holdings argues that its diversified portfolio with a number of subsidiaries makes a powerful case for shareholders. The financial institution operates the biggest agent banking community in Nigeria and accounts for 20% market share.
“It isn’t an accident that we’re as diversified as we’re, and that’s why, now and again, we question our portfolio and decide about what to strengthen, what to divest from, and what to do much less of. So leveraging our diversified companies and shared sources to do extra with much less,” Okonkwo mentioned.
FBN Holdings reported a revenue earlier than tax of ₦1610.9 billion within the 9 months to September 2024, representing a 128% leap in comparison with the earlier yr. In September 2024, the corporate bought its service provider banking enterprise FBNQuest Service provider Financial institution Restricted to EverQuest acquisition LLP.
What’s going to FBN Holdings use the cash for?
“We’ll be recapitalizing our flagship, First Financial institution, with a sure portion of the cash, and deploy the remaining for innovation and digitization throughout our franchise.”
FBN Holdings will make investments ₦103.12 billion (68.95%) to enhance the capital adequacy ratio (CAR) of its banking subsidiary, First Financial institution. Whereas it plans to take a position ₦29.46 billion (19.7% of the proceeds) on worldwide enlargement, it is going to take a “step-by-step method.”
Like its tier-1 counterparts, FBN Holdings is rethinking its expertise. For the reason that second half of 2024, Nigeria’s largest banks have upgraded their core banking functions.
FBN Holdings will make investments 9.85% of the capital raised—-₦14.73 billion—-to improve First Financial institution’s digital banking infrastructure and automation programs.
“We’re tech-led as a result of prospects wish to do transactions from the consolation of their automobile, home, and wherever, with out points.”
