…enjoy good ratings from S & P, Fitch, Agusto & Co.
Access Holdings, Guaranty Trust Holdings and Fidelity Bank are currently offering shrewd Nigerian investors the opportunity to be part owners of their banks through rights issues and offers for subscriptions cumulatively worth N878 billion.
The hybrid offers followed the mandate of the Central Bank of Nigeria (CBN) for deposit money banks, merchant and primary mortgage banks in the country to shore up their capital base in order to effectively play their roles of financial intermediation in Nigeria and beyond.
The Nigerian deposit money banks are banking on the fantastic performance the nation’s capital market has recorded from January to date. As at the close of business on July 19, 2024, the market capitalisation of listed stocks on the Nigerian Exchange Group (NGX) closed at N56.98 trillion, implying the value of listed stocks rose by N16.01 trillion year to date.
Fidelity Bank was the early bird as its N127 billion hybrid offer opened on June 20 and will be closing on July 29, 2024. The hybrid offer comprises rights issue of 3.2 billion ordinary shares of 50 kobo each at N9.29 per share subject to qualifying investors having their names on the register of the company as at the qualifying date. The rights issue comes at 1 new share for 10 existing shares for shareholders whose names appeared in the register of the company as at January 5, 2024.
Fidelity Bank is focused on select niche corporate banking sectors as well as Micro, Small and Medium Enterprises (MSMEs). It is rapidly implementing a digital-based retail banking strategy which has resulted in exponential growth in savings deposits over the last 12 years, with over 57 percent of customers enrolled on the bank’s flagship mobile/internet banking products.
The bank boasts of one of the most efficient information technology platforms in the sector with over 5.1 million mobile/online customers conducting over 433 million transactions just as the proliferation of digital banking has led to strong increase in non-interest income and customer reach.
The public offer consists of 10 billion ordinary shares of 50 kobo each at N9.75 per share.
In 2023, Fidelity Bank completed the acquisition of the Union Bank subsidiary in the United Kingdom, further confirming its growing influence in the global financial market. Its total assets are worth N6.81 trillion and it is ranked as the sixth biggest bank in Nigeria by asset. Its gross loans and deposits are worth N3.55 trillion and N4.51 trillion, respectively, ranking as the fifth and sixth biggest bank by those metrics.
Access Holdings’ rights issue of 17.77 billion ordinary shares opened on July 8, 2024 and will close on August 14, 2024. The rights issue comes at a price of N19.75 per share on the basis of 1 new share for two existing shares for shareholders whose names appeared in the register of the company as at June 7, 2024.
Access Holdings has strong subsidiaries which are Access Bank, Access Pensions, Hydrogen Payment Services Company, Oxygen X Finance Company, and Access Insurance Brokers.
Access Bank is Nigeria’s biggest bank by total assets worth N26.7 trillion. It has many branches in Nigeria in different strategic locations, and 14 subsidiaries across Africa with subsidiaries in the United Kingdom, Europe and Asia.
“Access Holdings Plc is well positioned to become a Top 5 banking group in Africa by 2027, supported by a robust management team. As of December 31, 2023, the Corporation’s financial highlights include total assets of N26.68 trillion, N8.9 trillion in loans and advances, N15.3 trillion in customer deposits, N2.19 trillion in shareholders’ funds, and a capital adequacy ratio of 19.01%. The Corporation achieved N2.59 trillion in gross earnings with a return on average equity (ROAE) of 36.2%,” Futureview Securities, one of the leading investment firms in Nigeria, stated in a note to investors.
Access Bank stated that the rights issue is being undertaken to enhance its CET 1 capital and capital adequacy ratio of its flagship subsidiary, Access Bank.
“Additional rationale includes ensuring an adequate capital buffer that is compliant with Basel III regulatory capital requirements; strengthening the Bank’s balance sheet, providing sufficient capital to withstand economic shocks; and supporting the Group’s growth objectives,” Access Holdings stated.
Guaranty Trust Holding Company’s offer opened on July 15 and will close on August 12, 2024. The financial group is in the market to raise N400.5 billion through an offer for subscription of nine billion ordinary shares of 50 kobo each at N44.50 billion per share.
According to Futureview Securities, “GTCO is a financially robust organization with a proven history of profitability. In 2023, the company’s profit after tax surged to N539.66 billion, marking a remarkable 218.99% increase compared to 2022. Furthermore, GTCO has maintained consistent dividend payments for the past 20 years.”
According to the financial group, upon completion of the offer, GTCO will utilise the net proceeds of N392.49 billion to recapitalise its flagship subsidiary, Guaranty Trust Bank, and for acquisition of strategic assets.
The group stated in the offer document that N370 billion, representing 94.3 percent, will be utilised to recapitalise GTBank within six months while N22.49 billion, representing 5.7 percent, will be deployed for growth and expansion, especially for the acquisition of pension fund administrator.
The three banks are highly rated by S & P Global, Fitch, as well as Agusto & Co.
