FBN Holdings pursues N730bn capital base by Q1’25

Onome Amuge

FBN Holdings has revealed its plans to surpass the minimum capital requirement set by the Central Bank of Nigeria (CBN), aiming to reach a total capital base of N730 billion by the first quarter of 2025.

Nnamdi Okonkwo, the group managing director of FBN Holdings, discussed the company’s capital-raising strategy recently during the company’s ‘Facts Behind the Rights Issue’ presentation at the Nigerian Exchange Limited (NGX).

Okonkwo  assured investors that the company’s current capital base of N230 billion would be bolstered by a phased capital-raising strategy.

Building on the initial rights issue of N150 billion, he confirmed that FBN Holdings plans to seek shareholder approval to raise an additional N350 billion at the upcoming Annual General Meeting (AGM).

Okonkwo further noted that while specific dates for future stages of the capital-raising initiative have been set, they are subject to regulatory approval and may be adjusted as necessary.

However, FBN Holdings aims to complete the process by the first quarter of 2025, according to Okonkwo, with the hope of having concluded the capital-raising initiative by that time.

FBN Holdings launched its capital-raising initiative through a rights issue on November 4, 2023. The initiative involves the issuance of 5.98 billion ordinary shares at a price of 50 kobo each, totaling N25 per share.

Existing shareholders of the company are entitled to subscribe for one new ordinary share for every six shares held as of October 18, 2024.

“The offer opened on the 4th of November, and it will close on 12th of December. Each shareholder has been provisionally allotted one new ordinary share of 50 cover for every six ordinary shares held as at October 18, the shares are priced at 25 Naira.”

“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 disclosed.

Okonkwo outlined the allocation of funds raised from the rights issue, stating that the funds would boost FirstBank’s operations and support investments in key areas such as digital banking, automation, and expansion into international markets deemed strategic for the bank’s growth.

He also spoke on the Group’s expansion plans, stating that FBN Holdings intends to deepen its presence in key African economies, as well as in existing hubs such as the United Kingdom, France, and China.

The FBN Group MD explained that the capital infusion provided by the rights issue will enable the Group to effectively compete on the global stage and reinforce its commitment to delivering innovative and customer-centric banking services.

In addition to capital raising, Okonkwo highlighted FBN Holdings’ broader diversification efforts across various financial service sectors, including commercial banking, asset management, and insurance brokerage.

To further align with this diversification strategy, the Group has identified a shift away from less profitable ventures, such as the divestment of its merchant banking arm, FBN Quest, in favour of focusing on scalable, high-margin businesses that can contribute to a more robust and profitable portfolio.

“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,” he added.

Okonkwo underscored FBN Holdings’ diversification strategy, which is aimed at fostering synergies across its various subsidiaries and maximising the potential of its dominant position in commercial and merchant banking, asset management, insurance brokerage, and other financial services.

He expounded on the rationale behind the decision to divest from FBN Quest, explaining that this reorientation aligns with the Group’s commitment to maximising profitability and scaling operations.

Okonkwo further elaborated on FBN Holdings’ strong financial performance for the first nine months of 2024, citing significant growth across various metrics, despite facing macroeconomic challenges.

Net interest income increased by 132 percent, reaching N873 billion, and non-interest income experienced an uptick of 82.5 percent, hitting N585 billion. Total assets surged by 62 percent to N27.5 trillion, loans grew by 47 percent to N9.4 trillion, and customer deposits experienced an increase of 57 percent to N16.7 trillion.

Return on Average Equity (ROAE) jumped from previous levels to reach 32.8 percent, reflecting the Group’s success in efficiently deploying its equity capital. Return on Average Assets (ROAA) also saw an increase from 2.3 percent to 3.2 percent.

Also speaking at the ‘Facts Behind the Rights Issue’ presentation at the NGX, Jude Chiemeka, the Chief Executive Officer of the Nigerian Exchange Limited, highlighted the NGX’s ongoing support for its listed companies in their efforts to raise new capital.

Chiemeka noted that the Exchange had facilitated a total of N5.7 trillion in capital across various asset classes, with a substantial portion of this capital coming from the financial services sector, in which FBN Holdings is a key player.

He also pointed out the important role played by the financial sector in the Nigerian economy, stating that, from 2019 to 2024, the sector traded over N8 trillion in securities.

He further dwelled on the sector’s significance in terms of job creation and overall economic growth, underlining the NGX’s continued commitment to supporting financial institutions, such as FBN Holdings, in their efforts to raise capital through various means, including rights issues.