Leading Nigerian financial institutions—Fidelity Bank, Guaranty Trust Holding Company (GTCO), and Access Holdings—are inviting Nigerian investors to participate in their fundraising initiatives, collectively valued at N878 billion. These efforts aim to strengthen their capital base, in line with recent mandates by the Central Bank of Nigeria (CBN) for banks to increase their financial capacity for more effective economic intermediation.
The fundraising efforts come amid a bullish performance in Nigeria’s capital market. By July 19, 2024, the Nigerian Exchange Group (NGX) reported a market capitalization of N56.98 trillion, marking a year-to-date increase of N16.01 trillion.
Fidelity Bank:
Fidelity Bank launched its hybrid offer on June 20, 2024, with a closing date of July 29. The offer includes:
- Rights Issue: 3.2 billion ordinary shares at N9.29 per share, available at a ratio of 1 new share for every 10 held, applicable to shareholders as of January 5, 2024.
- Public Offer: 10 billion shares priced at N9.75 per share.
Fidelity Bank focuses on corporate banking, MSMEs, and retail banking, supported by its advanced digital banking strategy. Over 57% of its customer base actively uses mobile and internet platforms, contributing to robust non-interest income. The bank, ranked 6th by total assets at N6.81 trillion, continues to strengthen its global presence, evidenced by its 2023 acquisition of Union Bank UK.
Access Holdings:
Access Holdings’ rights issue opened on July 8 and will close on August 14, 2024. This issue offers 17.77 billion ordinary shares at N19.75 per share, on a ratio of 1 new share for every 2 existing shares held as of June 7, 2024.
Access Holdings, Nigeria’s largest bank by assets (N26.7 trillion), has subsidiaries in Africa, the UK, Europe, and Asia. Its leadership targets becoming a Top 5 African banking group by 2027. As of December 2023, Access Holdings reported:
- Gross Earnings: N2.59 trillion
- Total Loans & Advances: N8.9 trillion
- Customer Deposits: N15.3 trillion
- Capital Adequacy Ratio: 19.01%
The bank aims to use the capital raised to comply with Basel III requirements, strengthen its balance sheet, and drive sustainable growth.
GTCO (Guaranty Trust Holding Company):
GTCO is raising N400.5 billion through a public subscription offer of 9 billion ordinary shares priced at N44.50 per share. The offer began on July 15 and will conclude on August 12, 2024.
GTCO plans to allocate N370 billion (94.3%) toward recapitalizing its primary subsidiary, Guaranty Trust Bank, within six months, while N22.49 billion (5.7%) will fund strategic expansion, including acquiring pension fund management businesses.
GTCO’s financial performance reflects its strong market position. In 2023, the bank achieved a profit after tax of N539.66 billion, a 219% increase from 2022, and has maintained a 20-year record of consistent dividend payouts.
Analyst Ratings:
All three banks—Fidelity, Access, and GTCO—have received favorable ratings from prominent agencies, including S&P Global, Fitch, and Agusto & Co., underscoring their financial strength and investor confidence.
The fundraising efforts by Fidelity Bank, Access Holdings, and GTCO represent a strategic push to meet regulatory requirements, expand operations, and enhance their financial positions. Nigerian investors are presented with an opportunity to participate in these institutions’ growth plans, leveraging their strong market performance and robust future outlook.
