Major banks are on course to raise N1.26 trillion in the capital market. It is in a bid to meet recapitalization conditions set by the Central Bank of Nigeria (CBN). Zenith Bank will today complete the pre-offer process for a N188.4 billion rights issue. FCMB Group will tomorrow interact with the investing public on its N113.98 billion public offer. The two offers are expected to open for public subscription in the next few days. This will raise the number of banks in the capital market to five and the initial target to N1.26 trillion. Shareholders of Fidelity Bank Plc at the weekend expanded the scope of the bank’s capital raising from its initial target of N127.1 billion to N205.45 billion. Access Holdings is raising N351 billion from existing shareholders while Guaranty Trust Holding Company (GTCO) is seeking N400.5 billion from the public. Zenith Bank and its professional advisers will today sign off the offer documents for a rights issue of 5.23 billion shares at N36 per share. The shares are pre-allotted to existing shareholders based on one new ordinary share for every six existing ordinary shares held as of the close of business on July 24.
FCMB Group launched a public offer of 15.197 billion ordinary shares of 50 kobo each at N7.50 per share.
Shareholders of Fidelity Bank at the weekend authorized the bank to issue an additional 8.2 billion ordinary shares to absorb potential oversubscription to its ongoing combined rights and public offer.
With a strong expectation that its offers, the first to hit the market, were heading to oversubscription, Fidelity Bank got shareholders to allow it to increase the rights issue and public offer by 3.2 billion ordinary shares and 5.0 billion shares respectively.
Fidelity Bank had launched a N127.1 billion hybrid offer, including a rights issue of 3.2 billion ordinary shares of 50 kobo each at N9.25 per share and a public offer of 10 billion ordinary shares of 50 kobo each at N9.75 per share.
There are indications that Fidelity Bank’s offers, which are scheduled to close today, may be extended as the bank seeks to optimize positive investors’ sentiment that has trailed its capital raising.
Access Holdings is offering about 17.773 billion ordinary shares of 50 kobo each to existing shareholders at N19.75 per share.
The rights were pre-allotted based on one new share for every two ordinary shares held as of June 7. The offer is scheduled to close on August 14.
GTCO is offering 9.0 billion ordinary shares of 50 kobo each at N44.50 per share. The offer is expected to close on August 12.
Under the ongoing recapitalization, the CBN is using a distinctive definition of minimum capital as an addition of share capital and share premium, rather than the entirety of shareholders’ funds used under the 2004 recapitalization.
With the distinctive definition, nearly all banks need to raise funds to retain their banking license.
There are, however, indications that this first cluster may be the biggest concentration of offers, in terms of offer values.
Most experts said they expected banks to be able to raise sufficient capital given their profile as some of the most profitable and liquid in the Nigerian market.
Managing Director, Arthur Steven Asset Management, Mr. Olatunde Amolegbe, said banks would ride on the back of strong fundamentals and a large investor base to successful recapitalization.
“I believe most of them will succeed not only because of their strong fundamentals but also because the investor base they will be targeting includes both foreign and local investors.
“Again, the market has sufficiently proven that it has absorptive capacity, so if these issues are well-packaged and well-priced, then there shouldn’t be problems,” Amolegbe said.
He noted that there might be mergers and acquisitions in the latter phase of the recapitalization, especially within the lower-tiered banks.
Managing Director of HighCap Securities, Mr. David Adonri, said the banks are well-positioned to raise much-needed capital.
According to him, the Nigerian economy is centred on short-term trading structures, with the banking industry oiling these structures and thus in a position to make profits all through the weather.
“This is why the industry is very profitable and attractive to investors. The task of raising about N5 trillion to re-capitalize banks is an easy challenge for them to surmount.
“The capital market has the depth, reach and world-class infrastructure to make the capital raising by banks successful,” Adonri said.
In the new recapitalization drive due to be completed on March 31, 2026, the CBN reviewed minimum capital requirements for commercial, merchant and non-interest banks.
The apex bank increased the new minimum capital for commercial banks with international affiliations, otherwise known as mega banks, to N500 billion; commercial banks with national authorization, N200 billion and commercial banks with regional license, N50 billion.
Others are merchant banks, N50 billion; non-interest banks with national licenses, N20 billion and non-interest banks with regional licenses, N10 billion minimum capital.
