First Bank of Nigeria Holdings (FBNH), a Lagos-based financial services holding group partially owned by Nigerian billionaire Femi Otedola, has applied for approval from the Nigerian Exchange to raise N139 billion ($181 million) in additional capital through a rights issue.
The rights issue, structured at one share for every four held by existing shareholders, is expected to result in the listing of 8.97 billion units of ordinary shares at N15.50 ($0.02) per share, thereby raising N139 billion ($181 million) in additional capital.
This strategic move follows the green light received at the group’s Annual General Meeting (AGM), conducted virtually in Lagos and attended by the lender’s shareholders. During the AGM, shareholders also endorsed the appointment of Otedola as a non-executive director, alongside various other key resolutions.
With an impressive 5.57-percent ownership as of June 30, 2023, Otedola stands as the largest shareholder in this Lagos-based financial services holding group. His involvement further cements his reputation as one of Africa’s leading billionaires.
FBN Holdings, a financial services conglomerate of considerable stature in Nigeria, serves as the parent company for First Bank of Nigeria Limited, the nation’s oldest commercial bank, with operations spanning across ten countries.
The capital injection of N139 billion ($181 million) via the rights issue is expected to have a positive impact on the group, reinforcing its financial stability and bolstering its operational capabilities.
Notably, since Otedola became a shareholder in FBN Holdings in October 2021, the financial services group has reported remarkable increase in its profit, solidifying its position as one of Nigeria’s biggest and most profitable lenders.
In the first half of 2023, FBNH experienced an extraordinary 230.8-percent increase in profit, rising from N56.6 billion ($72.91 million) in H1 2022 to an impressive N187.2 billion ($241.3 million) in the first six months of the current reporting period.
This notable surge in the group’s profit can be largely attributed to a substantial increase in interest income, which surged from N226.35 billion ($290.8 million) in H1 2022 to an impressive N383.28 billion ($492.4 million) in H1 2023.
This substantial boost was primarily due to the revaluation of investment securities in Naira terms, following the unification of the Naira in Q2 2023, resulting in a total of N110.96 billion ($142.57 million) in interest income.
