VENTURES AFRICA – Nigeria’s fourth largest Bank by market capitalisation, Access Bank Plc is set to raise N68 billion ($415 million) by way of rights issue following shareholders’ approval on Monday, the bank’s chief executive Herbert Wigwe has disclosed this week.
The lender said it would issue 7.64 billion shares at N8.90 each to existing shareholders, to bolster core capital and support its lending business.
“We would concentrate on concluding our rights issue while making sure that we maintain our growth momentum. We would continue to build a high quality loan book … and a low cost retail banking strategy,” Reuters quoted Wigwe as telling an analysts’ call.
According to Wigwe, who presented the bank’s nine-month results, loans grew 33 percent in the nine months to September. Shares in the top-tier lender shed 1.03 percent to N8.62, lower than the rights price, to value the bank at 197.25 billion naira ($1.20 billion).
Just like Access Bank is set out to do, several Nigerian banks have been looking to raise capital in recent months. Unity Bank and Diamond Bank have recently raised fresh equity capital, with First Bank and Skye Bank expected to follow suit. United Bank for Africa (UBA) and Sterling Bank are expected to announce equity raising plans this month.
“Our rights issue will ensure that we build a very strong buffer against the regulatory environment,” said Kumapayi, who noted that Access Bank’s capital adequacy ratio declined by 10 basis point to 19.9 percent during the nine-month in review occasioned by significant loan growth and an interim dividend payment.
The CEO told analysts that he expected the share sale to begin by
the second week of November, after the bank gains approval from the
Nigerian Securities and Exchange Commission, and the capital raising
should be completed by the end of the year.
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