Under the ongoing banking recapitalisation, about five banks are rounding off preliminary documentation and approval processes to raise more than N1 trillion in the second cluster of the capital raising.
Multiple sources yesterday confirmed that the banks have reached advanced stages in their pre-offer processes, with the two largest banks within the cluster expected to headline the capital raising this quarter.
The banks include United Bank for Africa (UBA) Plc, Stanbic IBTC Holdings Plc, Wema Bank Plc, Premium Trust Bank and Jaiz Bank Plc among others.
In the first cluster, five banks were believed to have raised more than N1.5 trillion in a momentous opening to the Central Bank of Nigeria (CBN) directed programme.
Those that have raised funds from the capital market are Guaranty Trust Holding Company (GTCO) Plc, Access Holdings Plc, Zenith Bank International Plc, Fidelity Bank Plc and FCMB Group Plc. Sterling Holding Company is rounding off its offer.
Investment banking sources said UBA and Stanbic IBTC Holdings would lead the next cluster with the two first-tier banks expected to launch their offers within this quarter.
Nigeria’s apex capital market regulator, Securities and Exchange Commission (SEC), is already considering applications from the banks.
A source close to SEC confirmed that there were some six offers currently undergoing regulatory approval process, the main regulatory hurdle preparatory to the launching of the offers.
UBA, which has shareholders’ approval for multi-instrument capital raising programme, is expected to start with a rights issue under which the bank plans to raise more than N384 billion.
Stanbic IBTC Holdings, which had launched a N550 billion capital raising process, has also reached advanced stage for the first tranche of its multi-instrument capital raising, according to market sources.
Wema Bank, with a national banking licence, is concluding pre-issuance processes to raise N200 billion in new equity funds, in a bid to preserve the 79 years old bank as a standalone entity post recapitalisation. Wema Bank, with a share capital and share premium of N15.13 billion, has one of the smallest starting points among the banks.
Jaiz Bank has also secured preliminary approvals to float a rights issue of about 5.41 billion ordinary shares of 50 kobo each at offer price of N1 per share. This may take the bank’s minimum capital base, under the new definition, to more than N34 billion.
Premium Trust Bank aims to raise about N180 billion in an ambitious plan to retain one of Nigeria’s youngest banks as a standalone entity. The bank commenced operations in April 2022.
