Stanbic IBTC Holdings Plc has launched a rights issue aimed at raising N148.7 billion, which commenced on January 15 and will run until February 21, 2025. The company is offering 2,944,772,083 ordinary shares at a price of N50.50 per share to its existing shareholders. This rights issue, which is based on the issuance of 5 new shares for every 22 held as of October 29, 2024, is designed to enhance the company’s capital structure.
The rights issue price of N50.50 per share is positioned just below the company’s 52-week high of N59.5 per share, which is close to a peak of N65.4, while its 52-week low was N45. The offering is being overseen by a consortium of financial institutions, including Stanbic IBTC Stockbrokers Limited, FBNQuest Securities Limited, Greenwich Securities Limited, Meristem Stockbrokers Limited, and RenCap Securities (Nigeria) Limited.
Expansion of the Business Portfolio
Stanbic IBTC Holdings is a leading financial services group in Nigeria with a diverse portfolio spanning banking, stock brokerage, asset management, investment advisory, insurance, pension management, and trusteeship. This rights issue is a significant step in supporting its long-term growth and strengthening its balance sheet.
Regulatory Context and Market Dynamics
The Central Bank of Nigeria (CBN) recently raised the minimum capital requirements for Nigerian commercial, merchant, and non-interest banks, which now includes a N500 billion capital requirement for commercial banks with international authorization, effective by March 31, 2026. This adjustment reflects the evolving regulatory landscape in the banking sector, and Stanbic IBTC’s rights issue is a proactive move to ensure it meets future capital demands.
Strong Financial Performance
Stanbic IBTC has demonstrated impressive growth in its financial performance for the nine months ending September 30, 2024, reporting a remarkable 95.9% increase in gross earnings, from N331.6 billion in 2023 to N649.5 billion. The company’s Profit Before Tax (PBT) rose by 72.2% to N222.9 billion, and Profit After Tax (PAT) increased by 67.4% to N182.9 billion.
Looking Ahead
On January 21, 2025, Stanbic IBTC will host a “Facts Behind the Rights Issue” presentation at the Nigerian Exchange Limited (NGX). This session will provide investors with deeper insights into the company’s strategic goals, business initiatives, and how the proceeds from the rights issue will fuel its continued expansion and success in the Nigerian and broader African markets.
