The Group Managing Director of FBN Holdings, Nnamdi Okonkwo, has announced plans to bolster Nigeria’s oldest banking group to a N730bn capital base by the first quarter of 2025, surpassing the Central Bank of Nigeria’s (CBN) recapitalization threshold of N500bn.
During the company’s ‘Facts Behind the Rights Issue’ presentation at the Nigerian Exchange Limited (NGX), Okonkwo outlined the Group’s strategic roadmap, beginning with a N150bn rights issue launched on November 4, 2023.
Okonkwo disclosed that the Group’s current capital base of N230bn will be strengthened through a phased capital-raising strategy, beginning with a N150bn rights issue.
This capital initiative, launched on November 4, 2023, involves the issuance of 5.98 billion ordinary shares at 50 kobo each, priced at N25 per share. The offer is available to existing shareholders at a ratio of one new ordinary share for every six shares held as of October 18, 2024.
“This initial phase is focused on securing N150bn through our rights issue to fortify the capital base of our commercial banking subsidiary, First Bank of Nigeria Limited (FirstBank),” Okonkwo explained.
Looking ahead, FBN Holdings will seek shareholder approval at its upcoming Annual General Meeting (AGM) to raise an additional N350bn, with the aim of achieving a N730bn capital base by early 2025.
“Once complete, we will exceed the regulatory capital requirement by over N230bn, solidifying our position in the market,” Okonkwo stated.
He stated that the funds from the rights issue will strengthen FirstBank’s operations and support investments in digital banking, automation, and branch expansion across strategic international markets.
According to Okonkwo, the Group aims to deepen its reach in key African economies as well as in existing hubs in the United Kingdom, France, and China. “This capital infusion empowers us to compete globally and reaffirms our commitment to innovative, customer-focused banking services,” he added.
Okonkwo also highlighted FBN Holdings’ diversification efforts across commercial and merchant banking, asset management, insurance brokerage, and other financial services.
As part of a strategic shift, the Group plans to divest from its merchant banking arm, FBN Quest, to focus on scalable, high-margin ventures.
“Our diversified portfolio offers stability; if one segment faces challenges, another can support the Group,” he noted.
He noted that FBN Holdings reported robust financial results for the first nine months of 2024, with net interest income up 132 per cent to N873bn and non-interest income rising 82.5 per cent to N585bn.
Total assets increased by 62 per cent to N27.5trn, while loans grew by 47 per cent to N9.4trn, and customer deposits rose 57 per cent to N16.7trn.
The Group’s Return on Average Equity (ROAE) surged to 32.8 per cent, while Return on Average Assets (ROAA) increased from 2.3 per cent to 3.2 per cent.
Okonkwo highlighted that these gains reflect the bank’s commitment to maximizing shareholder value despite macroeconomic headwinds.
He said the rights issue’s pricing at N25 per share, offered at a discount to the current market value, presents a strategic opportunity for existing shareholders. According to Okonkwo, this price point underscores the Group’s intention to reward long-term shareholders and attract new capital.
Chief Executive Officer of the Nigerian Exchange Limited, Jude Chiemeka affirmed the Exchange’s commitment to supporting listed companies in raising fresh capital.
He noted that, year-to-date, the Exchange has facilitated N5.7trn across various asset classes, with the financial services sector accounting for a significant portion.
“From 2019 to 2024, the financial sector has traded over N8trn in securities, highlighting its critical role in the economy, especially in job creation,” Chiemeka said, adding that the Exchange remains dedicated to assisting financial institutions in their capital-raising endeavors.