First Bank to raise additional N300m to meet CBN capital

Alex Omenye
Alex Omenye

First Bank Holdings has announced plans to raise an additional capital of ₦300 billion ($231 million) at an upcoming shareholders meeting later this month.

This is in response to the Central Bank of Nigeria’s call for a recapitalization drive that has stirred a frenzy among banks.

The capital infusion, as stated in a Monday release by First Bank Holdings, may take the form of a public offering, private placement, rights issue in either the Nigerian or international capital markets, or a blend of these options.

The decision to bolster its capital base stems from a directive issued by the banking regulator mandating all types of banks—commercial, merchant, and non-interest—to beef up their minimum capital requirements within a 24-month period, aimed at fortifying the stability of the financial sector.

Commercial banks with an international footprint are expected to get their capital by up to ₦500 billion to maintain operational licenses, while national and regional banks are tasked with raising ₦200 billion and ₦50 billion, respectively.

With the looming deadline of April 2024 fast approaching, many banks are scrambling to explore avenues for raising additional capital to meet the stringent CBN requirements.

Access Holdings, the parent company of Nigeria’s largest bank by assets, had previously outlined plans to raise up to ₦365 billion ($257 million) by offering shares to existing investors. Market analysts perceive these capital-raising plans as direct responses to the regulatory mandates set forth by the apex bank.

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