FBN Holdings Plc (FBNH), a leading financial institution in Nigeria, has announced the launch of a rights issue offering of 5,982,548,799m ordinary shares at N25.00 per share.
The initiative, which aims to raise a total of N149.56 billion, reflects the bank’s strategic response to regulatory requirements while bolstering its financial health and positioning it for sustained growth in an increasingly competitive banking landscape.
The rights issue offers existing shareholders the entitlement to one new share for every six shares held as of October 18, 2024. The initiative has already gained traction in the market, with FBNH’s share price closing at N26.80 on November 4, 2024—7.6% above the issue price—and rising further to 9.6% above the issue price by November 18.
FBN Holdings has outlined a clear strategy for deploying the proceeds of the rights issue to address critical areas of its operations. A significant portion, amounting to N103.12 billion (68.95%), will be allocated to improving the Capital Adequacy Ratio (CAR) of First Bank of Nigeria Limited, its flagship subsidiary.
This includes N77.34 billion earmarked for corporate lending and N25.78 billion for the retail segment. By bolstering its CAR, which stood at 17.75% as of the first half of 2024, FBN Holdings aims to create a buffer against financial shocks and comply with the Central Bank of Nigeria’s (CBN) regulatory requirements.
This move is especially critical given Nigeria’s high-risk environment characterized by currency fluctuations and inflationary pressures.
