Fidelity Bank Plc is set to raise approximately N32 billion in the first tranche of its recapitalization plan, which may see the bank raising over N160 billion in new equity funds.

Fidelity Bank
Fidelity Bank

The Nigerian Exchange (NGX) has confirmed that Fidelity Bank submitted an application for regulatory approval to float a N32 billion rights issue.

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The bank intends to offer 3.2 billion ordinary shares of 50 kobo each to existing shareholders at N10 per share. The shares have been pre-allotted based on the ratio of one new ordinary share for every 10 existing ordinary shares held as of the close of business on Friday, January 05, 2024.

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Fidelity Bank’s closing price at the NGX over the weekend was N14.20 per share, reflecting a 42% premium on the rights issue’s price. The notice from NGX suggests that the new issue may open in the coming weeks.

Anticipating the rights issue, investors have shown increased interest in Fidelity Bank’s shares, making it the most active stock on the NGX during the first trading week of the year.

Analysts estimate that Fidelity Bank could raise more than N160 billion through a hybrid capital raising plan involving new and existing investors. The bank had previously indicated plans to issue 13.2 billion ordinary shares of 50 kobo each to new and existing investors as part of efforts to boost its capital base.

The capital infusion is expected to support the bank’s growth trajectory, increase profitability, facilitate domestic and international expansion, and enhance its digital capabilities.

Fidelity Bank emphasized the importance of remaining agile, adaptable, and properly positioned to respond to developments in the banking sector, ensuring sustained competitiveness and shareholder value. The proposed capital raising aims to enable the bank to capitalize on emerging business opportunities, secure long-term profitability, and enhance its competitive advantage.

Mrs. Nneka Onyeali-Ikpe, Managing Director of Fidelity Bank, highlighted the institution’s substantial growth and the need to expand its capital base to seize emerging opportunities and enhance technology infrastructure for better customer service.