FBN Holdings set to exceed recapitalisation requirement

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At the Nigerian Exchange Limited (NGX) on Wednesday, the Group Managing Director, FBN Holdings, Nnamdi Okonkwo, disclosed that Group is set to exceed the Central Bank of Nigeria’s (CBN) minimum recapitalisation requirement of N500 billion as it targets N730 billion capital base by the first quarter of 2025.

Speaking to the capital market community on the Exchange during the Group’s ‘Facts Behind the Rights Issue” presentation, the FBN Holdings GMD outlined the Group’s comprehensive strategy, which began with the raising of an N150 billion rights issue exercise on November 4, 2023.

Okonkwo noted that the Group’s capital base currently at N230 billion will be bolstered through its ongoing Rights Issue and subsequent capital-raising strategies which had already been outlined.

“This initial phase is all about securing N150 billion through our Rights Issue by offering 5.98 billion ordinary shares of 50 kobo each at N25.00 per share to existing shareholders on the basis of one new ordinary share for every six ordinary shares held as at October 18, 2024.

“This Company’s plan to recapitalise our commercial banking subsidiary, First Bank of Nigeria Limited, (Firstbank),” Okonkwo stated.

He further revealed that FBN Holdings will seek shareholder approval to raise an additional N350 billion at the upcoming Annual General Meeting (AGM), ultimately reaching the N730 billion capital target by early 2025.

“When we are done, we will be over N230 billion higher than the regulator-stipulated capital,” he said.

Speaking of the use of the proceeds from the rights issue, Okonkwo noted that it will be channeled into strengthening the operations of FirstBank, as well as financing digital banking expansion, automation, and investments across its international branches.

“The bank also plans to deepen its footprint in strategic markets, including key African economies and its existing presence in the United Kingdom, France, and China. “This infusion of capital allows us to be more competitive on a global scale and reinforces our commitment to innovative, customer-centric services,” Okonkwo noted.

FBN Holdings’ extensive diversification strategy was also highlighted, with a focus on enhancing synergies across its subsidiaries and leveraging its stronghold in commercial and merchant banking, asset management, insurance brokerage, and other financial services.

In terms of performance, the Group reported impressive financials for the first nine months of 2024, with net interest income rising by 132 per cent to N873 billion and non-interest income climbing 82.5 per cent to N585 billion. Total assets grew by 62 per cent to N27.5 trillion, while the loan book expanded 47 per cent to N9.4 trillion, and customer deposits increased by 57 per cent to N16.7 trillion.

“Despite the macroeconomic headwinds, these numbers reflect our commitment to creating value for our shareholders,” Okonkwo asserted.

The bank’s Return on Average Equity (ROAE) rose to 32.8 cent, up by over 10 percentage points from 2023, while Return on Average Assets (ROAA) increased from 2.3 per cent to 3.2 per cent.

On the operational front, FBN Holdings has achieved a 13 per cent compound annual growth rate (CAGR) in operating expenses over the past five years.

According to Okonkwo, the right issue price of N25 per share offers current shareholders a compelling investment opportunity, as the rights issue price is set at a discount to the current market value.

The Chief Executive Officer, Nigerian Exchange Limited, Mr. Jude Chiemeka said the Exchange remains committed to providing a platform for listed corporates to raise fresh capital.

He disclosed that Year-till-date, the Exchange has been able to facilitate N5.7 trillion across different asset classes, stressing that the financial services sector plays an important role in the Nigeria capital market.

“Between 2019 to 2024, this sector has traded over N8 trillion worth of securities in our equities market and 51 per cent is largely attributable to the financial services sector. We think with the important financial service sector plays in the economy, particularly job creations, we are glad to assist the financial services sector around their capital raising exercise.”

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