Fidelity Bank Pursues N32bn New Equity From Shareholders

Fidelity Bank Plc has finalized plans to raise approximately N32 billion in the initial phase of a recapitalization initiative, with the potential for the bank to raise over N160 billion in new equity funds. The Nigerian Exchange (NGX) has confirmed that Fidelity Bank submitted an application for regulatory approval for a N32 billion rights issue.

As part of this rights issue, Fidelity Bank will offer 3.2 billion ordinary shares with a nominal value of 50 kobo each to existing shareholders at N10 per share. The shares have been pre-allotted on the basis of one new ordinary share for every ten existing ordinary shares held as of the close of business on Friday, January 5, 2024.

Over the weekend, Fidelity Bank closed on the NGX at N14.20 per share, indicating a premium of 42% on the price set for the rights issue. The NGX notice implies that the new issue may open in the coming weeks following the traditional regulatory process.

In anticipation of the rights issue, investors have shown increased interest in Fidelity Bank's shares, making it the most actively traded stock on the market in the first trading week of the year.

Analysts project that Fidelity Bank could raise more than N160 billion through a hybrid capital-raising plan that involves both new and existing investors. The bank had previously announced plans to issue 13.2 billion ordinary shares with a face value of 50 kobo each to bolster its capital base.

Under this plan, Fidelity Bank aimed to conduct a public offer for 10 billion shares and a rights issue for 3.2 billion shares. Market analysts estimate that, based on the current market valuation, the bank may potentially raise N160 billion, though the final offer prices will be influenced by market conditions.

Fidelity Bank emphasized the need for new capital to sustain its robust growth trajectory, enhance profitability, support domestic and international expansion, and improve its digital capabilities. The bank sees the new hybrid capital raising as a strategic move to capitalize on emerging business opportunities, ensuring long-term profitability, competitive advantage, and increased shareholder value.

Mrs. Nneka Onyeali-Ikpe, Managing Director of Fidelity Bank Plc, highlighted the bank's significant growth and the necessity to expand its capital base to seize emerging opportunities while enhancing technology infrastructure to serve a broader customer base.