Nigerian Billionaire Femi Otedola-Linked Bank Plans $181m Capital Raise Through Rights Issue

By Omokolade Ajayi

First Bank of Nigeria Holdings (FBNH), a financial services holding group based in Lagos and partially owned by Nigerian billionaire Femi Otedola, has submitted an application to the Nigerian Exchange for approval to raise N139 billion ($181 million) in extra capital through a rights issue.

The rights issue is structured to offer one share for every four held by existing shareholders. It is anticipated that this will result in the listing of 8.97 billion ordinary shares at N15.50 ($0.02) per share, thereby generating N139 billion ($181 million) in additional capital.

This strategic move comes after the approval received at the group’s virtual Annual General Meeting (AGM) in Lagos, attended by the bank’s shareholders. At the AGM, shareholders also supported the appointment of Otedola as a non-executive director and approved various other significant 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.