Stanbic IBTC Holdings to raise N550bn via debt, rights issue

Stanbic IBTC Holdings Plc has revealed plans to raise about N550bn through a debt issuance programme and a right issue.

This was disclosed in a notice of its annual general meeting filed with the Nigerian Exchange Limited on Wednesday.

Several players in the banking sector have announced plans to raise additional capital to meet the new capital requirements of the Central Bank of Nigeria.

In late March, the apex bank directed commercial banks in Nigeria with international authorisation to shore up their capital base to N500bn and national banks to N200bn.

It added that non-interest banks with national and regional authorisation needed to increase their capital to N20bn and N10bn, respectively.

The recapitalisation exercise is expected to commence from April 1 April to March 31, 2026.

At the AGM scheduled for next month, the shareholders of Stanbic IBTC Holdings will deliberate and give a verdict on the planned fundraising.

The directors of the holding company are seeking shareholder’s approval for a special Resolution: (a) “That subject to receipt of any required regulatory approvals and pursuant to Article One of the Company’s Articles of Association, the Directors be and are hereby authorised to establish a Debt Issuance Programme in an amount of up to N400,000,000,000 or such foreign currency equivalent thereof as the directors may consider appropriate, for the purpose of issuing debt securities (to include senior unsecured or secured, subordinated, convertible, preferred, equity-linked or such other forms of debt obligations) by way of public offering, private placement, additional tier one or tier two capital raising, investments, book building process or any other method, in tranches of such amounts and at such dates, coupon or interest rates and upon such terms and conditions as may be determined by the directors.”

The board of Stanbic IBTC Holdings is also seeking authorisation “To raise additional equity capital of up to N150,000,000,000 by way of a Rights Issue or offer for subscription on such terms, tranches, conditions and dates as may be determined by the Directors.”

Shareholders would also vote on increasing the issued and paid-up share capital of the company from N6,478,498,581.50 divided into 12,956,997,163 ordinary shares of 50 Kobo each to a maximum of up to N8,250,000,000.00 by the creation of up to 3,543,002,837 ordinary shares of 50 Kobo each.

According to its audited report for 2023, profit before tax grew to N172.91bn from the prior year’s N100.27bn, as revenue rose by 48 per cent to N355.17bn.

Gross loans and advances granted to customers grew by 69 per cent to N2.09tn during the year, with assets under management appreciating by 28 per cent to over N7.2tn due to the vibrant returns on assets generated by the fund managers and the acquisition of new assets.

Projecting into the current financial year, the Chief Executive of Stanbic IBTC Holdings, Demola Sogunle, said, “The year 2024 is expected to be an improvement on the previous year due to the continuous implementation of the monetary and fiscal policies of the current administration, which is expected to lead to the improvement of the economy.

“Some of these policies have already been implemented in 2023 and the resultant effect should also impact the macro-economic conditions in 2024. Our key focus is to enhance client experience, execute with excellence and drive sustainable growth and value in the four business segments through partnerships and value creation.”