Nigeria Fidelity Bank Leads as Nigerian Banks Scramble for Equity Amid Recapitalization Drive

Explore Nigerian banks' race to meet new capital requirements set by the CBN, led by Fidelity Bank's N127.1 billion initiative. Discover how banks like Access Holdings and Stanbic IBTC are also raising funds to comply with regulations and support economic growth.

As the Nigerian banking sector intensifies efforts to meet new capital requirements set by the Central Bank, Fidelity Bank Plc has emerged as a frontrunner with its launch of a comprehensive capital-raising initiative. The bank's strategy includes a combined rights issue and public offer aimed at generating up to N127.1 billion. This move allows existing shareholders to purchase additional shares at a discounted price through the rights issue, while the general public can subscribe to newly issued shares at a slightly higher rate.

The Central Bank's directive, which came into effect on April 1, 2024, mandates Nigerian banks to significantly increase their minimum capital bases within a strict 24-month timeline. This initiative is designed to strengthen the sector's resilience and enhance its capacity to support Nigeria's ambitious economic growth targets, projected to reach $1 trillion by 2030.

In response to these regulatory changes, other major banks such as Access Holdings, Stanbic IBTC Holdings, and FCMB Group are also finalizing plans to bolster their capital positions. Access Holdings, for instance, aims to raise $1.5 billion, including N365 billion through a rights issue. Stanbic IBTC Holdings, on the other hand, is pursuing a N400 billion debt issuance program alongside additional equity capital of N150 billion.

These proactive capital-raising efforts underscore the banking sector's commitment to securing adequate funds, managing risks effectively, and complying with stringent regulatory standards amidst Nigeria's evolving economic landscape.