Fidelity Bank has successfully surpassed its initial target of N127.1 billion in the first phase of its recapitalization efforts. This milestone marks a significant achievement for the bank as it moves forward with its capital-raising strategy.
In an email to investors, Nneka Onyeali-Ikpe, the Managing Director of Fidelity Bank, expressed gratitude for the strong investor confidence that enabled the bank to exceed its target. “With the conclusion of the Combined Offer, I am delighted to announce that we have met and surpassed the capital-raise target we set for ourselves in the first phase of our capital-raise exercise,” she stated.
Details of the Capital-Raising Effort
Fidelity Bank initiated this recapitalization effort in response to the Central Bank of Nigeria’s (CBN) directive for banks to strengthen their capital base. The bank launched a combined offer that included 10 billion ordinary shares available at N9.75 per share through a public offer, and an additional 3.2 billion ordinary shares at N9.25 per share through a rights issue.
The offer, initially set to conclude on July 29, was extended after receiving approval from the Securities and Exchange Commission (SEC) due to high demand and oversubscription. This extension allowed Fidelity Bank to issue an additional 8.2 billion shares, bringing the total shares issued to 21.4 billion. The breakdown of this issuance includes 15 billion shares sold through the rights issue and 6.4 billion shares through the public offer.
Implications for Fidelity Bank
Although the exact amount raised has not been disclosed, the bank confirmed that it exceeded the N127.1 billion target. With a current paid-up share capital of N129.705 billion, Fidelity Bank now requires an additional N243.195 billion to meet the N500 billion minimum capital level required to maintain its international banking license.
If the bank achieves full subscription of the newly issued shares, which could bring in an additional N205.45 billion, the remaining capital needed to meet the regulatory requirement would be reduced to N160.845 billion.
Context of the Recapitalization in the Banking Sector
Fidelity Bank’s successful capital raise comes amid a broader trend among Nigerian banks to bolster their capital in compliance with the CBN’s requirements. Other banks, such as Zenith Bank, FCMB Group, and Access Holdings, are also engaged in similar efforts, collectively seeking to raise about N751.9 billion.
Access Holdings, in particular, has faced challenges, with its rights issue being less favorably received compared to Fidelity Bank’s offer, partly due to its offer price being higher than the market price during the subscription period.
These capital-raising efforts are particularly critical for banks with international banking licenses, which need to collectively raise N2.26 trillion by March 2026 to meet the new regulatory capital requirements.
