Fidelity Bank Plc Announces Combined Public Offer and Rights Issue to Raise N127.1 Billion
Key Details:
- Date: Thursday, June 20, 2024
- Total Capital Raise: Up to N127.1 billion
- Rights Issue: 3.2 billion ordinary shares at N9.25 per share (1 new share for every 10 held as of January 5, 2024)
- Public Offer: 10 billion ordinary shares at N9.75 per share
- Closing Date: Monday, July 29, 2024
Purpose: The Combined Offer is part of Fidelity Bank’s strategy to boost its share capital in line with the revised minimum capital requirements set by the Central Bank of Nigeria (CBN) on March 28, 2024. The capital raised will be used for IT infrastructure, business and regional expansion, and investment in product distribution channels.
Issuing Houses:
- Lead Issuing House: Stanbic IBTC Capital
- Joint Issuing Houses: Iron Global Markets Limited, Cowry Asset Management Limited, Afrinvest Capital Limited, FSL Securities Limited, Futureview Financial Services Limited, Iroko Capital Market Advisory Limited, Kairos Capital Limited, and Planet Capital Limited.
Recent Performance:
- Share Price Increase: From N1.68 per share (May 31, 2019) to N10.20 per share (May 31, 2024)
- Stock Market Performance: Fidelity Bank’s share price increased by 507.14% over five years, averaging an annual gain of 101.43%.
- Financial Growth: Profit Before Tax (PBT) grew by 131.5% to N124.26 billion in 2023; Net interest income rose by 81.6%; Profit After Tax increased by 112.9% to N99.45 billion.
Analyst Insights: Investment analysts have assigned Fidelity Bank a BUY recommendation, citing its historical and current performance, growth strategy, quality of management, and human capital.
Strategic Moves:
- Acquisition: African Export-Import Bank (Afreximbank) facilitated a $40 million investment to support Fidelity Bank’s acquisition and recapitalization of Union Bank UK.
- International Expansion: This acquisition aims to establish a pan-African financial institution to serve both African banks and the diaspora.
Corporate Governance: Fidelity Bank has received the highest corporate governance rating (CG+), reflecting its adherence to best practices and full disclosure requirements.
Market Position: As Nigeria’s sixth-largest bank, Fidelity Bank continues to expand its market share, driven by strong financial performance and strategic initiatives. The bank has consistently paid dividends since 2006, with a total dividend of 85 kobo per share for 2023, a 70% increase from the previous year.
Future Prospects: With robust growth and compliance with regulatory requirements, Fidelity Bank is poised to attract more investors and continue its trajectory of impressive financial performance and shareholder returns. The ongoing capital raise is expected to further enhance its competitive position and support its long-term strategic objectives.
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