On the recapitalisation watch this week, Fidelity Bank Plc announced the successful conclusion of the first tranche of its capital raise through its Public Offer and Rights Issue following the completion of the capital verification exercise conducted by the Central Bank of Nigeria (CBN) and approval of the Basis of Allotment by the Securities and Exchange Commission (SEC). The bank received 108,046 applications for 23,791,687,463 Ordinary Shares, totalling N231,968,952,764.25 Public Offer. Out of these, 107,588 applications for 23,768,724,000 Ordinary Shares totalling N231,745,059,000.00 were valid based on the terms of the Offer and the CBN’s verification. The Public Offer was 237% subscribed and 150% allotted.

Wema Bank plans to raise N200bn in fresh capital through a Rights Issue and a Special Placement Exercise, set to commence on April 1, 2025. This marks its capital-raising initiative's second and final tranche, complementing the N40bn raised in the first tranche.

Zenith Bank Plc  Rights Issue of 5,232,748,964 ordinary shares at N36.00 per share and a Public Offer of 2,767,251,036 ordinary shares at N36.50 per share recorded a 160.47% subscription rate, with 4,440,587,250 shares allotted following the offer terms and the CBN’s capital verification exercise. Stanbic IBTC Holdings Plc’s ongoing offer of Rights Issue of N148.7bn is scheduled to close on February 21, 2025. The group offered existing shareholders 2,944,772,083 ordinary shares of 50 kobo each at N50.50 per share based on 5 Issue Shares for every 22 Ordinary Shares held as of October 29, 2024.

These capital raises align with the Central Bank of Nigeria’s (CBN) recapitalisation exercise, ensuring that banks remain well-capitalised and resilient amid economic uncertainties. However, analysts strongly advise investors to assess how these banks deploy fresh capital. Strong fundamentals and how this capital raising is utilised will determine how these banks sustain profitability and shareholder value (see Table 1 below). 

The NGX-Banking Index closed bullish and gained by % week-on-week (W-o-W) to close at  All Tier 1 banks, extending its positive return on year-to-date (YTD). ETI was the highest gainer with 23.93%, followed closely by Accesscorp and FBNH with 18.03% and 15.69% returns. During the week, the Boards of UBA, Zenith and Accesscorp approved the group’s financial statement and payment of final dividend for the year ending December 31st, 2024, thereby boosting their share prices. In addition, FBNH announced a rebranding to ’’First HoldCo Plc (FirstHoldCo).

The Tier 2 banks recorded positive returns, with   Wema as the highest gainer with a return of 31.87%, followed by FCMB and Stanbic with 18.09% and 11.98%, respectively. Nevertheless, Fidelity's Public Offer and Right Issue allotment increased the issued share capital from N26.70bn to N36.70bn (see table below).

For feedback and further information, kindly contact [email protected]

Subscribe to our market intelligence notes for updates. Thank you.