Four banks have unveiled plans to raise fresh funds to drive their operations and remain competitive.
The lenders are Sterling Bank, Diamond Bank, Wema Bank and Stanbic IBTC Holding Company. They will be raising N209.2 billion in the coming months.
Sterling Bank told its shareholders that it was planning to raise additional capital this quarter.
Specifically, the bank will raise tier 1 capital through a rights issue of N12 billion and a private placement of N19.2 billion.
The bank’s Group Managing Director, Mr Yemi Adeola, said the fund was necessary to implement medium to long term strategic objectives.
Adeola, who spoke at the bank’s Annual General Meeting (AGM) in Lagos, said the process of raising the fund began in the first quarter of the year. He added that the lender would continue to drive growth strategies domestically, focusing on building long-term relationships and creating sustainable value for customers.
Stanbic IBTC Holding Co, the Nigerian unit of South Africa’s Standard Bank Group, plans to raise N22.5 billion ($150 million) in new capital this year, its Chief Executive Officer Sola David-Borha had said.
She said the bank plans to use the Tier 2 capital for investments in infrastructure and lending. “Loans and advances are planned to grow by 15 per cent by end of 2013, from six per cent in 2012,” she said.
Stanbic’s net income for the three months through March rose to N3.6 billion from N2.5 billion a year earlier, it said. Revenue climbed to N26.6 billion from N20.4 billion. The lender is seeking to boost its deposit base by 25 per cent this year, David-Borha said.
Diamond Bank will be raising N118 billion ($750 million) from an undisclosed source to expand its operations while Wema will secure N35 billion through special placing and listing of additional shares for same purpose. Already, Wema has therefore held a completion board meeting to issue 23,333,333,334 Ordinary shares of 50k each at N1.50 per share.
Diamond Bank’s Chief Financial Officer (CFO) Abdulrahman Yinusa said the lender will raise the money through a share sale or debt offering this year. The bank’s shareholders have already approved the proposal.
Wema Bank’s management also said it got regulatory approval to raise N35 billion through special placing and listing of additional shares. The fund raising comes a year after the lender raised its annual loan-growth target to 40 per cent from 20 per cent.
In a statement, Wema said a regulatory approval from the Nigerian Stock Exchange (NSE) and Securities & Exchange Commission (SEC) had been secured. It said with this development, it is expected that the bank would complete the process of raising the required capital before April 30, 2013.
Managing Director, Wema Bank, Segun Oloketuyi, said the lender was delighted at the development. He said it signifies a milestone in the entire process which began last December.
“The completion of the placement process will further enable Wema Bank compete more effectively in the banking industry and also enhance the quality of products and services being offered to an increasing customer base. We will remain focused on efficient service delivery whilst scaling our business organically and strategically for superior returns to all stakeholders,” he said.
Oloketuyi also expressed his appreciation to regulators who have supported the ongoing transformation process in the bank and also praised the painstaking efforts of all parties to the offer in ensuring strict compliance and adherence to all regulatory requirements by the bank that has made the approvals possible.
The bank expects to use the funds realised from the special placing to grow its business, invest in information technology infrastructure and expand its operations.
On seeking a National Banking Licence to enable it to expand its scope of physical operations beyond the geographical boundaries, Oloketuyi said the process of exploring available options to securing a National Banking Licence from the Central Bank will commence on completion of the special placing.
In December last year, Wema Bank announced plans to raise capital by way of a special placing with commitment from investors already secured to the tune of the N35billion offer size. From all indications and with already high interest and demand, the placing will be fully subscribed.
Analysts said the banks are returning to profitability after Central Bank of Nigeria (CBN) Governor Lamido Sanusi fired the CEOs of eight of the country’s 24 banks in 2009 and gave them a N620 billion ($3.9 billion) bailout, after lending to equity speculators and fuel importers pushed the industry to near collapse.
Source: The Nation
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