Fidelity Bank Gets Approval to Proceed With Second Phase of Its Capital-Raising Initiatives

• The shareholders have given their approval for Fidelity Bank Plc to proceed with the second phase
• The development follows the successful completion of the initial stage of its capital-raising activities
• The bank's issued share capital increased from N26.7 billion to N36.7 billion as part of this development

Legit.ng journalist Zainab Iwayemi has 5-year-experience covering the Economy, Technology, and Capital Market.

After successfully completing the first phase of its capital-raising operations, which witnessed a considerable oversubscription of its Public Offer and Rights Issue, Fidelity Bank Plc has obtained the consent of its shareholders to move forward with the second step.

As the bank moves closer to fulfilling the Central Bank of Nigeria's (CBN) N500 billion minimum regulatory capital requirement for banks with international authorization by March 31, 2026, it has also increased its issued share capital from N26.7 billion to N36.7 billion, strengthening its financial foundation.

Fidelity Bank revealed in a notification submitted to the Nigerian Exchange Limited (NGX) that the approvals were made at an Extraordinary General Meeting (EGM) on February 6, 2025.

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The creation of 20 billion more ordinary shares, each worth N0.50 kobo, was overwhelmingly approved by shareholders, bringing the bank's issued share capital to N36.7 billion.

Additionally, they gave the Board of Directors permission to raise more equity capital in tranches and on terms the Board deems appropriate, subject to regulatory approvals, through a variety of methods such as rights issues, public offers, or private placements.

Nneka Onyeali-Ikpe, the managing director and chief executive officer of Fidelity Bank, thanked investors for their faith in the bank's long-term plan.

“We are delighted to announce the successful completion of the first phase of our capital-raising initiatives through a Public Offer and Rights Issue, which were 237.92 per cent and 137.73 per cent oversubscribed, respectively. The positive result is a testament to the strength of the bank’s franchise in the capital market,” she said.

She also emphasized that the bank would be better positioned for long-term growth and enhanced service delivery in the next stage of capital raising.

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“As we go into the next phase of capital raising, we reaffirm our commitment to providing cutting-edge financial solutions to our customers and delivering sustainable returns to our stakeholders,” she said.

Strong investor confidence was shown throughout the first round of the capital-raising process, which included a rights issue and public offer. The Public Offer received 107,588 legitimate applications for 23,768,724,000 ordinary shares worth N231.7 billion, and it was oversubscribed by 237.92%.

The Rights Issue, which had 6,903 valid applications for 4,407,252,795 ordinary shares worth N40.7 billion, was also oversubscribed by 137.73%.

Fidelity Bank claimed that the increase in share capital and other fundraising activities would give it the financial flexibility it needs to further its efforts at digital transformation, look into new growth prospects, and broaden its market reach as part of its long-term expansion strategy.

“This capital raise is a strategic move to strengthen our balance sheet, enhance our competitive position, and ensure we can continue to deliver exceptional value to our customers and stakeholders,” the bank noted.

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To guarantee complete subscription, the resolutions adopted at the EGM also provide the Board the authority to underwrite the capital-raising effort if needed.

The freshly issued shares will rank equal to the existing shares when they are listed on the NGX. In order to reflect the increased issued share capital and guarantee regulatory compliance, shareholders also approved amendments to the bank's memorandum and articles of association.

Fidelity Bank reiterated its resolve to carry out the next stage of its capital-raising plan in accordance with the rules set forth by the Corporate Affairs Commission (CAC), the Securities and Exchange Commission (SEC), and the Central Bank of Nigeria (CBN).

Fidelity Bank Declares 159% Increase in Profit

Legit.ng reported that in the first half of 2024, Fidelity Bank, a tier-two bank in Nigeria, recorded an after-tax profit of 159%.

In H1, the bank's after-tax profit increased to N159.8 billion from N61.9 billion during the same time the previous year, per the bank's financial statement that was made public on the Nigerian Exchange Group.

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The bank announced a 107% increase in gross profits from N247.1 billion to N512.8 billion.

Source: Legit.ng