Okonkwo: FBN Holdings Targets N730bn Capital Base by Q1 2025

Kayode Tokede

The Group Managing Director, FBN Holdings, Nnamdi Okonkwo, yesterday revealed that the Nigeria’s premier banking group plans to attain a N730 billion capital base by the first quarter of (Q1) 2025, stressing that the financial institution aimed to exceed the Central Bank of Nigeria’s (CBN) minimum recapitalization requirement of N500 billion for international authorisation.

Speaking to the capital market community during the Group’s “Facts Behind the Rights Issue” presentation in Lagos, Okonkwo outlined the Group’s comprehensive strategy, which began with the raising of a N150 billion rights issue exercise on November 4, 2023.

Okonkwo revealed that the Group’s capital base currently at N230 billion will be bolstered through its ongoing Rights Issue and subsequent capital raising strategies which had already been outlined.

“This initial phase is all about securing N150 billion through our Rights Issue by offering of 5.98 billion ordinary shares of 50 kobo each at N25.00 per share to existing shareholder on the basis of one (1) new ordinary share for every (6) ordinary shares held as at October 18, 2024.

“This Company’s plan to recapitalize our commercial banking subsidiary, First Bank of Nigeria Limited, (Firstbank),” Okonkwo stated.

According to Okonkwo, the right issue price of N25 per share offers current shareholders a compelling investment opportunity, as the rights issue price is set at a discount to the current market value.

He urged shareholders to accept their rights partially or in full with the possibility to apply for addition rights, adding that shareholders can trade all or some rights by instructing their stockbrokers or directly on the NGX platform. 

He stated that shareholders can take no action, as their shareholding gets diluted.

He further revealed that FBN Holdings will seek shareholder approval to raise an additional N350 billion at the upcoming Annual General Meeting (AGM), ultimately reaching the N730 billion capital target by early 2025. “When we are done, we will be over N230 billion higher than the regulator-stipulated capital.”

Highlighting the use of the proceeds from the N150 billion rights issue, Okonkwo noted that it will be channeled into strengthening the operations of FirstBank, as well as financing digital banking expansion, automation, and investments across its international branches.

“The bank also plans to deepen its footprint in strategic markets, including key African economies and its existing presence in the United Kingdom, France, and China. “This infusion of capital allows us to be more competitive on a global scale and reinforces our commitment to innovative, customer-centric services,” Okonkwo noted.

FBN Holdings’ extensive diversification strategy was also highlighted, with a focus on enhancing synergies across its subsidiaries and leveraging its stronghold in commercial and merchant banking, asset management, insurance brokerage, and other financial services.

 Okonkwo addressed the decision to divest from merchant banking through FBN Quest, citing a strategic reorientation that would enable the group to focus on more profitable, scalable ventures. “Our diversified portfolio provides a buffer; if something goes wrong on one side, there’s support from another,” he said, citing the bank’s resilience amid Nigeria’s challenging economic landscape.

He noted that the group is driving its growth through expansion, innovation, integration, and sustainability.

In terms of performance, he explained that the Group reported gross earnings of N2.25 trillion in nine months ended September 2024, 134 per cent increase from oN962.4 billion in nine months 2023,  driven by impressive growths in both interest and non-interest income.

“Strong earnings drove a 128per cent YoY growth in the bottom-line, to N610.9 billion in nine months oof 22024 from N267.9billion in nine months of 2023,” he said. 

Total assets grew by 62 per cent to N27.5 trillion, while the loan book expanded 47 per cent to N9.4 trillion, and customer deposits increased by 57 per cent to N16.7 trillion.

“Despite the macroeconomic headwinds, these numbers reflect our commitment to creating value for our shareholders,” Okonkwo stated.

The bank’s Return on Average Equity (ROAE) rose to 32.8per cent, up by over 10 percentage points from 2023, while Return on Average Assets (ROAA) increased from 2.3 per cent to 3.2 per cent. On the operational front, FBN Holdings has achieved a 13 per cent compound annual growth rate (CAGR) in operating expenses over the past five years.

The Chief Executive Officer, Nigerian Exchange Limited, Mr. Jude Chiemeka said the Exchange remains committed to provide a platform for listed corporates to raise fresh capital.

He disclosed Year-till-Date, the Exchange has been able to facilitate N5.7 trillion   across different asset classes, stressing that the financial services sector plays an important role in the Nigeria capital market.

“Between 2019 to 2024, this sector has traded over N8 trillion worth of securities in our equities market and 51 per cent is largely attributable to the financial services sector.

“We think with the important financial service sector plays in the economy, particularly job creations, we are glad to assist the financial services sector around their capital raising exercise.”