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Stanbic IBTC Holdings (Stanbic IBTC), a Lagos-based financial services holding company founded by Nigerian businessman Atedo Peterside, is seeking shareholder approval to raise an additional N550 billion ($442.8 million) through a debt issuance program and a right issue. This follows the bank’s 2023 performance and a regulatory push for increased capitalization.
The lender’s decision to bolster its capital base follows a robust financial year in 2023. The company’s profit surged by 74 percent year-on-year to N140.62 billion ($108.9 million), solidifying its position as a powerhouse in the Nigerian banking sector. The robust performance was driven by rising domestic interest rates and favorable foreign exchange movements.
The capital raise aligns with the Central Bank of Nigeria’s (CBN) recent hike in minimum capital requirements for tier-one banks, aiming to bolster the financial system and support President Bola Ahmed Tinubu’s $1-trillion GDP target by 2030.
Nigerian bank in spotlight with $442.8 million capital plan
Subject to regulatory approvals, the capital injection plan entails a debt issuance program of up to N400 billion ($321.68 million) and an additional N150 billion ($121.21 billion) to be raised through a rights issue. The announcement coincides with the upcoming 12th Annual General Meeting (AGM) scheduled for May 16, 2024, at Eko Hotel and Suites, Victoria Island, Lagos.
The capital raise echoes the 2005 scenario, when the CBN’s increased minimum capital requirements triggered a wave of mergers and acquisitions (M&A) in Nigeria’s banking sector. Analysts anticipate similar consolidation activity as banks race to meet the new 24-month deadline.
Stanbic IBTC’s strategic capital expansion
Stanbic IBTC, joining local peers Access Holdings Plc, Guaranty Trust Holding Company, and Zenith Bank Plc, is seeking to raise N550 billion ($442.8 million) in fresh capital, underscoring the Nigerian banking sector’s commitment to meeting new regulatory requirements. The move also strengthens Stanbic IBTC’s position within the country’s evolving financial landscape.
A leading Nigerian financial services group with total assets of $4 billion as of Dec. 31, 2023, Stanbic IBTC ranks among the top 15 most-capitalized companies on the Nigerian Exchange. Founded in 1989 as an investment bank, the group had Atedo Peterside, a prominent figure in Nigerian banking, as its first CEO. Peterside, who also founded Anap Business Jets and the Atedo N.A. Peterside Foundation, currently owns a 1.14-percent stake in Stanbic IBTC.
Lagos-based financial services holding company’s capital raise will solidify its financial position and fuel its future growth aspirations. This proactive approach to regulatory changes signals the group’s readiness to navigate challenges and seize opportunities in an ever-evolving market.
