Fidelity Bank Opens Public Offer for Nigerians To Buy Its Shares, Sets Price, Closing Date

• Fidelity Bank has opened a public offer for Nigerians to purchase its shares as it looks to raise capital, as mandated by the CBN
• Nigerians interested in participating in the public offer will need to contact their stockbrokers or financial advisers
• Fidelity Bank shares have recorded a massive appreciation of more than 500% on the stock market since 2019

Legit.ng journalist Dave Ibemere has over a decade of business journalism experience with in-depth knowledge of the Nigerian economy, stocks, and general market trends.

Fidelity Bank Plc today, June 20, 2024 opened an application for its N127.2 billion combined rights and public offer.

This is the bank's first capital raising initiative under the banking recapitalisation exercise mandated by the Central Bank of Nigeria (CBN).

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Legit.ng had reported that the apex bank on March 28, 2024, in a circular, directed commercial banks with international authorisation to increase their capital base to N500 billion and national banks to N200bn.

It also said those with regional authorisation are expected to achieve a N50 billion capital base.

The bank expects the additional equity capital to support its efforts to drive sustained growth and diversification of its earnings base.

Details of Fidelity bank's public offer

Fidelity Bank offers a rights issue of 3.2 billion ordinary shares of 50 kobo each at N9.25 per share.

The bank is also simultaneously offering 10 billion ordinary shares of 50 kobo each to the general investing public at N9.75 per share.

The acceptance and application lists for the rights issue and public offer, which open today, are scheduled to close on Monday, July 29, 2024.

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The rights issue has been pre-allotted on the basis of one new ordinary share for every 10 existing ordinary shares held as at the close of business on Friday, January 05, 2024.

The Nation reports that Nneka Onyeali-Ikpe, the Chief Executive Officer and managing director of Fidelity Bank Plc, said the net proceeds of the combined offer would be applied towards investment in information technology infrastructure, business and regional expansion, and product distribution channels.

Fidelity Bank's performance

Fidelity Bank shares are among the best performing on the Nigerian stock market.

Official trading data shows that the over 300,000 current shareholders of the bank have earned 545.83% in capital gains over the past five years, between May 31, 2019, and June 20, 2024,

Fidelity Bank's share price, which closed May 31, 2019, at N1.68 per share, has successively risen to N10.20 per share by the end of May 2024.

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On Thursday, June 19, 2024, the bank's share price closed at N10.85.

Where to buy Fidelity Bank share

Stanbic IBTC Capital is the lead issuing house to the combined offer. The joint issuing houses include 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.

Expert speaks

Speaking on the public offer, a financial analyst, Akana Emma, noted that the offer is a good one for anyone interested.

"I believe Fidelity Bank is currently undervalued, given several key metrics in its financial performance, for example the rising deposit which shows customer confidence, loan and deposit among others.

"I expected the bank shares to increase by at least 50% At N9.75, I believe anyone who buys will make money. This is just my opinion"

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Legit.ng previously reported that the CBN reassured the banking public of their deposits' safety and the banking system's resilience.

This followed fears in some quarters following the termination of Heritage Bank Plc's license.

The acting director of the apex bank's corporate communications department, Hakama Sidi Ali, refuted rumours that the regulator was considering cancelling the operating licenses of other banks.

Proofreading by James Ojo Adakole, journalist and copy editor at Legit.ng.

Source: Legit.ng