In response to the Central Bank of Nigeria’s recapitalization directive, several banks are collectively turning to rights issues to raise over N500 billion. FBN Holdings is offering a N150 billion rights issue at N25 per share, while United Bank for Africa (UBA) aims to raise N239.4 billion at N35 per share. Stanbic IBTC is also preparing a N148.71 billion rights issue. These efforts are designed to meet regulatory requirements, strengthen lending capacity, and expand digital and sustainable operations across Africa.
Majority shareholders are playing a pivotal role in driving these rights issues, with the aim of maintaining their stakes and avoiding dilution. Experts suggest this strategy is beneficial for existing shareholders who take up their rights, as it positions them for potential capital gains once the recapitalization targets are met. Shareholders’ associations are encouraging members to maximize their investments in these offers, emphasizing the long-term returns expected after the banks achieve the required capital thresholds.
Analysts and stakeholders highlight that the recapitalization strategy is not just about compliance but also reflects the banks’ confidence in their existing investor base. While the directive initially targets current owners, there is room for new investors if needed. Banks are employing calculated strategies, including rights issues, public offerings, and hybrid methods, to ensure the best outcomes for their stakeholders and the banking sector’s stability.
