The Group Managing Director, FBNHoldings, Nnamdi Okonkwo, has revealed it’s plan to raise a total of N730 billion to increase the capital base of it’s Commercial banking group by the first quarter of (Q1) 2025.
He said that the of the major target of the First Bank is to exceed the Central Bank of Nigeria’s (CBN) minimum recapitalization requirement of N500 billion.
Speaking in Lagos at the Nigeria Exchange during the Group’s ‘Facts Behind the Rights Issue” presentation, Okonkwo said that the FBNHoldings strategy to raise find for the its commercial banking recapitalisation will began with the raising of N150 billion rights issue exercise which kicked off on November 4 to close on Thursday, December 12, 2024.
Okonkwo revealed that the company will raise additional N350 billion in its second round of fund raising after securing shareholders approval at the forth coming annual general meeting.
He said that with the bank ‘s current capital base of N280 billion and with N500 billion fund raising the capital base of First Bank would far higher than the CBN new capitalisation exercise.
“The initial phase of fund raising is all about securing N150 billion through our Rights Issue by offering of 5.98 billion ordinary shares of 50 kobo each at N25.00 per share to existing shareholder on the basis of one (1) new ordinary share for every (6) ordinary shares held as at October 18, 2024.
“This Company’s plan to recapitalize our commercial banking subsidiary, First Bank of Nigeria Limited, (Firstbank),” Okonkwo stated.
“The FBNHoldings will seek shareholders approval to raise an additional N350 billion at the upcoming Annual General Meeting (AGM), ultimately reaching the N730 billion capital target by early 2025. “When we are done, we will be over N230 billion higher than the regulator-stipulated capital.”
Highlighting the use of the proceeds from the rights issue, Okonkwo noted that it will be channeled into strengthening the operations of FirstBank, as well as financing digital banking expansion, automation, and investments across its international branches.
“The bank also plans to deepen its footprint in strategic markets, including key African economies and its existing presence in the United Kingdom, France, and China. “This infusion of capital allows us to be more competitive on a global scale and reinforces our commitment to innovative, customer-centric services,” Okonkwo noted.
FBN Holdings’ extensive diversification strategy was also highlighted, with a focus on enhancing synergies across its subsidiaries and leveraging its stronghold in commercial and merchant banking, asset management, insurance brokerage, and other financial services.
Okonkwo addressed the decision to divest from merchant banking through FBN Quest, citing a strategic reorientation that would enable the group to focus on more profitable, scalable ventures.
“Our diversified portfolio provides a buffer; if something goes wrong on one side, there’s support from another,” he said, citing the bank’s resilience amid Nigeria’s challenging economic landscape.
In terms of performance, the Group had reported impressive financials for the first nine months of 2024, with net interest income rising by 132 per cent to N873 billion and non-interest income climbing 82.5 per cent to N585 billion. Total assets grew by 62 per cent to N27.5 trillion, while the loan book expanded 47 per cent to N9.4 trillion, and customer deposits increased by 57 per cent to N16.7 trillion.
“Despite the macroeconomic headwinds, these numbers reflect our commitment to creating value for our shareholders,” Okonkwo asserted. The bank’s Return on Average Equity (ROAE) rose to 32.8per cent, up by over 10 percentage points from 2023, while Return on Average Assets (ROAA) increased from 2.3 per cent to 3.2 per cent. On the operational front, FBN Holdings has achieved a 13 per cent compound annual growth rate (CAGR) in operating expenses over the past five years.
According to Okonkwo, the right issue price of N25 per share offers current shareholders a compelling investment opportunity, as the rights issue price is set at a discount to the current market value.
The Chief Executive Officer, Nigerian Exchange Limited, Mr. Jude Chiemeka said the Exchange remains committed to provide a platform for listed corporates to raise fresh capital.
He disclosed Year-till-Date, the Exchange has been able to facilitate N5.7 trillion across different asset classes, stressing that the financial services sector plays an important role in the Nigeria capital market.
“Between 2019 to 2024, this sector has traded over N8 trillion worth of securities in our equities market and 51 per cent is largely attributable to the financial services sector. We think with the important financial service sector plays in the economy, particularly job creations, we are glad to assist the financial services sector around their capital raising exercise.”
