By Dorcas Adeoye
Fidelity Bank has taken a bold step in the quest to meet up with the Central Bank of Nigeria (CBN)’s recapitalisation policy as it signed an agreement with issuing houses to supervise the raising of up to ₦127,100,000,000.00 by way of a Rights Issue to existing shareholders and a Public Offer. Recall that the CBN had announced last March a fresh recapitalisation policy which commenced from April 1, 2024, and exected to end on March 31, 2026.
Earlier at an Extra-Ordinary General Meeting held on Friday, 11 August 2023, the Bank’s shareholders approved the Rights Issue and Public Offer at the under which a sum of N3,200,000,000 (Three Billion Two Hundred Million) ordinary shares of 50 kobo each will be offered in the ratio of 1 new ordinary share for every 10 ordinary shares held as of 05 January 2024, at ₦9.25 per share. For the Public Offer, 10,000,000,000 ordinary shares of 50 kobo each will be offered to the general investing public at ₦9.75 per share.
Speaking at the signing event held at the bank’s headquarters between Fidelity Bank, Stanbic IBTC Capital and other issuing houses, Dr. Nneka Onyeali-Ikpe, Fidelity Bank’s Managing Director said the proceeds will be used for IT infrastructure upgrades, business expansion into new regions, and investments in product distribution channels.
Dr. Onyeali-Ikpe said: “It is worth mentioning that our capital-raising exercise was proactively initiated when we obtained shareholders’ approval in August 2023, prior to the CBN’s recapitalisation circular published on 28 March 2024. This demonstrates our understanding of not only our business needs and strategic plans but also our deep knowledge of the Banking sector and the economy at large. So, indeed, we are setting the pace.
“Fidelity Bank has had an impressive performance in the last 3 years. Our PBT has grown by a CAGR of 64%, Low-Cost Deposits by 44%, while Total Assets increased by a CAGR of 31%.
“In the 2023 financial year, we achieved a 113% growth in PAT from N47 billion to N99 billion. The increase came from 56% growth in interest income and 193% increase in non-interest income. The growth in interest income was primarily spurred by a higher yield environment and strong earning assets base, while the increase in non-interest income was led by double-digit growth across our top income lines, supported by increased customer transactions.
“As expected, our Return on Equity increased from 16% in 2022 to 27% in the 2023 financial year.” Dr. Onyeali-Ikpe explained.
Stanbic IBTC Capital is the Lead Issuing House to the Combined Offer, whilst the Joint Issuing Houses include Iron Global Markets Limited, Cowry Asset Management Limited, Afrinvest Capital Limited, FSL Securities Limited, Futureview Financial Services Limited, Iroko Capital Market Advisory Limited, Kairos Capital Limited and Planet Capital Limited. The Acceptance and Application lists for the Rights Issue and Public Offer are expected to open on Thursday, 20 June 2024 and close on Monday, 29 July 2024.
Chief Executive Officer (CEO), Stanbic IBTC Capital, Oladele Sotubo commended Fidelity Bank’s commitment to the capital raise and for being early adopters of the CBN’s new capital rules. He expressed confidence the transaction would encourage other corporates to explore the capital markets.
The Rights Circular for the Issue, which contains a Provisional Allotment Letter and the Participation Form, will be mailed directly to shareholders of the Bank. Printed copies of the Public Offer Prospectus can be obtained at the offices of Fidelity Bank and the Issuing Houses during the Public Offer Application Period.
All existing shareholders and prospective investors are encouraged to read the Rights Circular and Prospectus and, where in doubt, consult your Stockbroker, Fund/Portfolio Manager, Accountant, Banker, Solicitor, or any other professional adviser for guidance before subscribing.
