- To seek shareholders’ consent
Ahead of the March 31, 2026 banking sector recapitalization deadline announced by the Central Bank of Nigeria, FBN Holdings Plc, one of Nigeria’s leading financial groups, has recently hinted at its plan to raise N300 billion by hybrid issues.
The group said it will seek the consent of shareholders at a virtual Extraordinary General Meeting which will be held on April 30, 2024.
“The hybrid capital raise transaction is expected to comprise the issuance of shares via a public offering, private placement, and rights issue in the Nigerian or international capital markets at prices to be determined by way of a building process or any other valuation method or combination of methods, in such tranches, series or proportions and at such period or dates, coupon or interest rates, within such maturity periods and upon such terms and conditions as may be determined by the Board of Directors, subject to obtaining the approvals of the relevant regulatory authorities.
“That the capital raise referred to in resolution (a) above may be underwritten on such terms as may be determined by the Directors, subject to obtaining the approvals of the relevant regulatory authorities,” FBNH said in a statement said by its Acting Company Secretary, Adewale Arogundade.
The Directors are expected to get the authorisation of shareholders during the EGM to undertake all necessary actions to secure the listing and admission to trading of securities issued pursuant to the foregoing resolution on the Official List of the Nigerian Exchange Limited, and /or on any other securities exchange(s) or market(s).
Directors of FBNH are also seeking the power to appoint such professional parties and advisers and to perform all such other acts and do all such other things as may be necessary, to give effect to the above resolutions, including without limitation, executing necessary documents in connection with the capital raise, determining the final structure of the capital raise, interfacing and complying with the directives of any regulatory authority.
Upon the completion of the processes for the allotment of the new ordinary shares in accordance with the resolutions of the EGM, the Memorandum and Articles of Association of the Company will be amended as necessary to reflect the Company’s newly issued share capital.
According to the CBN, come March 31, 2026, the new minimum capital base for commercial banks with national authorisation is now N200 billion, while the new requirement for those with regional authorisation is N50 billion.
Merchant banks would be expected to raise their capital to N50 billion, while the new requirements for non-interest banks with national and regional authorisations are N20 billion and N10 billion, respectively.
The CBN governor, Olayemi Cardoso, had continuously drummed the new capital regime since November 2023, preparing the industry to service the new economy envisaged by President Bola Tinubu’s administration.
This serves as the reason why he has continually warned banks not to spend or pay dividends from the huge forex gains by the industry in the wake of the unification of the foreign exchange windows that have accrued huge earnings for the banks.
The last time the CBN increased the capital base for banks was in 2005, when the current Anambra State Governor, Charles Soludo, as the apex bank chief ordered the capital base of banks to go up to ₦25 billion from N2 billion.
The CBN in July, 2004, announced the recapitalization of the banking sector from N2 billion to N25 billion with effect from 31st December, 2005.
The initiation of increasing the banks’ minimum capital base to N25 billion in 2006 led to a remarkable reduction in the number of banks from 89 to 24, as some of the banks merged and some were completely taken over by the stronger banks.
