Stanbic IBTC Holdings’ N148.7bn Issue To Boost Bank Subsidiary’s Recapitalisation

Stanbic IBTC Holdings Plc has unveiled plans to allocate 96.3 per cent of the N148.7 billion raised from its ongoing rights issue to bolster its banking subsidiary.

This strategic move underscored the Group’s commitment to driving economic development through investments in critical sectors of the Nigerian economy.

The company is offering 2.94 billion ordinary shares at N50.50 each, and offered on a five-for-22 basis to existing shareholders, amounting to N148.71 billion.

The acting chief executive officer, Stanbic IBTC Group, Kunle Adedeji stated this at the Company’s ‘Facts Behind the Issue’ presentation at the Nigerian Exchange Limited held yesterday in Lagos.

Adedeji said while 96.3 per cent or N140.43 billion of the rights issue proceeds would be deployed into the banking subsidiary, while 3.62 per cent, amounting to N 5.27 billion will be allocated to Investments in other subsidiaries and working capital

On the percentage allocation of the 96.3 per cent, he said “2.22 per cent or N3.24 billion will target investment in new green rated branches and distribution channels, 14.13 per cent or N20.59 billion of the fund to go into IT infrastructure refresh, while 80.03 per cent or N116.60 billion to boost lending to clients in key business segments”

Adedeji stated that these allocations align with Stanbic IBTC’s mission to support industries critical to Nigeria’s economic growth, noting that the financial sector is central to achieving the country’s $1 trillion economy target.

The chief executive officer of Stanbic IBTC Bank, Wole Adeniyi, described the rights issue as a strategic step to solidify the group’s leadership in Nigeria’s financial sector, encouraging shareholders to take advantage of the opportunity to increase their equity stake.

According to him, by strategically allocating its rights issue proceeds, Stanbic IBTC aimed to drive sustainable economic growth, enhance financial inclusion, and maintain its position as a leader in Nigeria’s banking industry.

The CEO of NGX Limited, Jude Chiemeka, urged more listed corporates to take advantage of the exchange platform to raise capital and contribute to economic development.

“Listed companies are not only better positioned to access capital for growth but also demonstrate higher levels of transparency and tax compliance, which significantly benefits the economy.”

The rights issue follows a stellar financial performance by Stanbic IBTC for the nine months ended September 2024 as the Holding Company recorded 95 per cent year-on-year increase in gross earnings to N650 billion with 67 per cent rise in profit after tax.

The group’s prudent risk management was reflected in a capital adequacy ratio of 15.7 per cent and a non-performing loan ratio of 3.2 per cent. Between 2019 and 2023, Stanbic IBTC delivered an average annual return of 27 per cent and a dividend payout ratio of 54 per cent.