The share price of FBN Holdings rose in value on the Nigerian Exchange Limited on Wednesday, the opening day of the rights issue of the financial institution.
At the close of trading, the shares of FBN Holdings rose by 1.65 per cent to N27.65. This is the highest value it had traded at on the floor of the exchange in seven days.
The bank will sell 5,982,548,799 shares of 50 kobo each to its shareholders at N25 per share. FBN Holdings is the fourth tier-1 banking group to launch a capital raise to meet capital requirements, joining Guaranty Trust Holding Company GTCO, Access Holdings, and Zenith Bank Plc.
Speaking at the Facts Behind The Rights Issue Presentation at the NGX held on Wednesday, the Group Managing Director of FBN Holding, Nnamdi Okonkwo, said that the firm had been working on its capital raise before the Central Bank of Nigeria announced new capital requirements for banks in the country.
He said, “I want you to know that the plan to raise N150bn started last year, we have done our numbers and we knew the firepower that we needed. While we were at it, CBN came with the N500bn requirement, so you can see that we are ahead of the curve.
“For now, we will focus on N150bn, and at our AGM, we will apply to raise another N350bn, by which time, we will have exceeded N500bn. It is important that we raise capital. The offer opened on November 4 and would close on December 12. The shares are priced at N25 which you will agree with me is a discount from the current price.”
Okonkwo also emphasised the strategic importance of the rights issue, stating, “We will be leveraging our diversified portfolio of businesses and shared resources to ‘do more with less’, optimising costs, improving efficiency, and boosting revenues. We aim to strategically expand into new geographies via both physical and digital approaches while continuing to explore attractive business adjacencies.”
He noted FBN Holdings’ enthusiasm in utilising the NGX Invest platform, highlighting that “this digital platform allows us to reach a wider investor base and facilitate seamless participation in our capital raise.”
By using the NGX Invest, FBN Holdings joins six other Nigerian banks that have recently tapped into this innovative platform to distribute a total of eight public offers and rights issues. To date, NGX Invest has facilitated approximately N1.26tn (about $770 million) in capital raises within the banking sector.
In his opening comments at the event, the Chief Executive Officer of the NGX, Jude Chiemeka, reiterated that “the NGX remains committed to providing the platform for our listed corporates to be able to raise capital. Year-to-date, we have been able to facilitate over N5.7tn across different asset classes.
“This set of financial services sector is a really important segment in our market. So, from 2019 to 2024, this sector has traded over N8tn worth of securities on the equities market and 51 per cent of that is largely attributable to this sector we think that because of the importance that this sector provides to the economy in terms of job creation, we are particularly glad we can help this sector around their capital-raise exercise.
“The NGX remains committed to technology and remains at the heart of our strategy. The NGX Invest is one of the solutions that the NGX has brought to the market.”