Investors have a significant opportunity to broaden their investments as major banks prepare to raise ₦1.26 trillion in the capital market.
Entrepreneurng learnt that this move is in response to the Central Bank of Nigeria‘s (CBN) recapitalization requirements.
Zenith Bank is set to finalize the pre-offer process for a ₦188.4 billion rights issue today. Meanwhile, FCMB Group will engage with investors tomorrow about its ₦113.98 billion public offer. Both offers are expected to be open for public subscription soon.
According to the Nation these developments will bring the total number of banks involved in capital market activities to five, targeting an aggregate of ₦1.26 trillion.
Over the weekend, Fidelity Bank Plc received shareholder approval to increase its capital raising scope from ₦127.1 billion to ₦205.45 billion.
Access Holdings plans to raise ₦351 billion from its existing shareholders, while Guaranty Trust Holding Company (GTCO) is seeking ₦400.5 billion from the public.
Zenith Bank will authorize offer documents today for a rights issue of 5.23 billion shares priced at ₦36 per share. These shares are allocated to current shareholders at one new ordinary share for every six existing shares held as of July 24.
FCMB Group has initiated a public offer for 15.197 billion ordinary shares at ₦7.50 each.
Over the weekend, Fidelity Bank shareholders approved issuing an additional 8.2 billion shares to accommodate potential oversubscription.
Fidelity Bank initially launched a hybrid offer of ₦127.1 billion, including a rights issue and a public offer priced at ₦9.25 and ₦9.75 per share, respectively.
There are signs that Fidelity Bank’s current offer, closing today, might be extended to capitalize on the favorable investor sentiment.
Access Holdings is offering approximately 17.773 billion shares at ₦19.75 per share to existing shareholders, with a subscription window closing on August 14. GTCO is offering 9.0 billion shares at ₦44.50 per share, with the offer closing on August 12.
Under the ongoing recapitalization process, the CBN has redefined minimum capital requirements to include only share capital and share premium, differing from the broader shareholder funds definition used in 2004. Consequently, most banks need to raise additional funds to maintain their licenses.
Experts believe that this initial group of banks represents the largest cluster of offerings by value. They expect banks to successfully raise the necessary capital due to their strong financial standing and appeal to both local and international investors.
According to Olatunde Amolegbe, Managing Director of Arthur Steven Asset Management, banks are likely to succeed in their fundraising efforts due to their robust fundamentals and extensive investor base. He also noted that mergers and acquisitions might occur later in the recapitalization process, particularly among smaller banks.
David Adonri, Managing Director of HighCap Securities, highlighted that the banking sector’s focus on short-term trading makes it profitable and attractive to investors. He believes that raising approximately ₦5 trillion for recapitalization is feasible due to the capital market’s capacity and infrastructure.
The CBN’s new recapitalization drive, set to be completed by March 31, 2026, increases minimum capital requirements for different types of banks.
These include ₦500 billion for international commercial banks, ₦200 billion for national commercial banks, ₦50 billion for regional commercial banks, ₦50 billion for merchant banks, ₦20 billion for national non-interest banks, and ₦10 billion for regional non-interest banks.
