Sterling, GTCO, Ecobank lead recapitalisation moves, as banks race against CBN deadline

By Grateful Ogunjebe

With the Central Bank of Nigeria’s (CBN) recapitalisation deadline drawing closer, Nigerian banks are intensifying their capital-raising efforts through a mix of strategic offerings, rights issues, and international listings to meet new regulatory requirements and reinforce their capital strength.

Sterling Financial Holdings Company has unveiled plans to raise $400 million under a multi-instrument Shelf Programme, following resolutions passed at its second Annual General Meeting. The fundraising will be implemented in tranches through public offers, rights issues, private placements and other capital market instruments. The proposed issuance will cover convertible and non-convertible bonds, commercial papers, sukuks, medium-term notes, equity shares and global depository receipts, subject to regulatory approval and appropriate pricing methodologies such as book-building.

Guaranty Trust Holding Company Plc (GTCO) has also made notable progress in its recapitalisation strategy, having secured a listing on the London Stock Exchange (LSE). Its 36.43 billion ordinary shares have been admitted to the Official List of the UK Financial Conduct Authority, trading under the symbol “GTHC”. The shares debuted at $0.070 on July 17, slightly below the $0.075 benchmark, in a move seen by analysts as evidence of the group’s expanding global reach.

Similarly, Ecobank Transnational Incorporated (ETI) has announced plans to raise $250 million in Additional Tier 1 (AT1) capital through a private placement of contingent convertible notes. The capital injection is expected to improve the bank’s capital adequacy ratio, enhance financial resilience, and support its pan-African expansion objectives.

Meanwhile, the CBN has released transitional guidelines to ensure a structured exit from regulatory forbearance frameworks granted during the COVID-19 era. Effective from 30 June 2025, the new rules require banks to regularise exposures, including breaches of the Single Obligor Limit (SOL) and non-performing credit facilities.

Several banks have now disclosed updates on their recapitalisation efforts in response to the CBN directive.

Wema Bank Plc, for instance, concluded a rights issue of 14.29 billion shares at N10.45 per share in May, raising N150 billion. Managing Director Moruf Oseni confirmed that the bank had met the minimum capital requirement, pending final approval by the CBN. An additional N50 billion capital raise is currently under review by the Securities and Exchange Commission (SEC).

Zenith Bank Plc reported a 160 per cent subscription to its combined Rights Issue and Public Offer, raising its share capital to N614 billion. The bank noted that its SOL breach relates to a single obligor and will be addressed before the 30 June deadline. It added that two other credit facilities under forbearance had already been substantially provisioned.

Fidelity Bank is targeting an extra N200 billion via a private placement after previously raising N273 billion through a Public Offer and Rights Issue, which recorded oversubscriptions of 237.92 per cent and 137.73 per cent respectively. The bank said its SOL exposure involves two obligors, while four other facilities under forbearance have been significantly provisioned. These are expected to be fully resolved by the first half of 2025.

Access Holdings has already met the N500 billion capital threshold set by the CBN for banks with international licences. Its recent rights issue of 17.77 billion shares at N19.75 per share raised N351 billion, placing its banking subsidiary, Access Bank Plc, ahead of the year-end 2024 deadline.

First Bank Holdings (First HoldCo) is gearing up for a N350 billion private placement, having earlier completed a N150 billion Rights Issue with a 25 per cent oversubscription that brought in N187.6 billion. The bank revealed that its SOL breach involves two foreign currency loans significantly impacted by the 200 per cent naira devaluation between 2023 and 2024. It expects to regularise these exposures in the second half of 2025.

United Bank for Africa (UBA) raised N251 billion in an oversubscribed rights issue but accepted N240 billion, boosting its share capital to N355.2 billion. The outstanding N144.8 billion is expected to be raised later in the year. Chairman Tony Elumelu has also made a personal investment of N43.91 billion by acquiring 1.27 billion shares at an average price of N34.64.

Abbey Mortgage Bank is planning to raise N100 billion through a rights issue, public offering or hybrid instrument to transition into a regional commercial bank, in accordance with the CBN’s minimum capital requirement of N50 billion for such licences.

Unity Bank Plc remains in talks regarding a possible business combination with Providus Bank but has yet to disclose details of its recapitalisation plan.

Analysts have expressed cautious optimism, advising investors to pay close attention to banks’ provisioning practices, especially given expectations of higher loan loss charges during this transition phase. Market observers anticipate more clarity in the coming quarters as regulatory assessments proceed and additional capital-raising initiatives unfold.