FBNH Awaits AGM to Get Approval From Shareholders Over Its Plan to Raise New Capital

With the staggering economy in Nigeria and stocks experiencing major declines, FBN Holdings Plc, a financial services company, has announced that it will raise new capital subject to approval from shareholders at the group's annual general meeting next month.

This information was stated in the notice of the group's 11th annual general meeting, which was distributed to shareholders.

The announcement highlighted FBN's intentions on raising cash through a rights offering. The bank intends to generate cash by issuing 8.974 billion Ordinary shares at 50 kobo each.

On Monday, July 26, FBN Holdings shares finished trading at N19.85 on the Nigerian Exchange Limited.

The notice partly reads!

• “That the company’s issued share capital be and is hereby increased from NGN17.95bn made up of 35,895,292,792 ordinary shares of 50 Kobo each to N22.35bn by the creation of 8.973,823,198 ordinary shares of 50 Kobo each.

• “That there shall be a capital raise. The capital raise transaction shall be by way rights issue, on such terms and conditions and on such dates as may be determined by the Directors, subject to obtaining the approvals of the relevant regulatory authorities.”

Still on that, the company also announced its appointment of Mr. Femi Otedola as a non-executive director. However, this decision is awaiting shareholder approval at the next AGM. On July 9, 2023, Otedola was appointed.

In addition, Samson Ariyibi, who was appointed as the group's executive director of finance, investment, management, and oversight on October 21, 2022, will be submitted to shareholders for approval of his appointment. 

Resolutions Awaiting Approval From Shareholders in the Forthcoming AGM

• That the Rights Issue referred to in Resolution may be underwritten on such terms as may be determined by the Directors, subject to obtaining the approvals of the relevant regulatory authorities. That the shareholders, under Resolution, will waive their preemptive rights to any unsubscribed shares under the Rights Issue in the event of an under-subscription. 

• That the Directors be authorized to appoint such professional parties and advisers and to perform all such other acts and do all such other things as may be necessary to give effect to the above resolutions, including without limitation, complying with the directives of any regulatory authority.  

• That Clause 6 of the Memorandum of Association of the Company be amended to reflect the newly issued share capital of 22.435 billion by the creation of 8.974 billion Ordinary shares of 50 Kobo each.

• That the Directors’ fees for the financial year ending December 31, 2023, and for succeeding years, until reviewed by the Annual General Meeting, be fixed at N50 million for each Director and N63.7 million for the Board Chairman That the Company’s Issued Share Capital be increased from N17.948 billion made up of 35.895 billion Ordinary shares of 50 Kobo each to N22.434 billion by the creation of 8.974 billion Ordinary shares of 50 Kobo each.

More Insights on FBN Holdings Plc Revenue

As of the conclusion of June 2023, Otedola was listed as a large stakeholder with 5.57% of total shareholdings, equating to 10,000,000 units of shares owned directly and 1,989,342,376 units of shares held indirectly through Calvados Global Limited. 

In its unaudited financial records for the first half (H1) of the fiscal year ended June 30, 2023, FBN Holdings Plc declared a profit after tax of N206.3 billion. 

Profit before tax increased by 213.8% from N65.7 billion in H1 2022 to N206.3 billion in H1 2023, according to the Holding Company's H1 results reported on the NGX. 

Profit after tax increased by 231.1% to N187.2 billion from N56.5 billion in H1 2022, while profits per share increased by 234% to N5.19 from N1.55 in 2022. 

Gross earnings increased by 82.8%  to N656.6 billion in H1 2022 from N359.2 billion in H1. 

Interest income increased by 69.3% from N383.3 billion to N226.4 billion in the same period in 2022, while non-interest revenue increased from N257.9 billion to N120.6 billion.

Operating income increased by 81.1% from N273.5 billion in H1 2022 to N495.3 billion, while loss impairment charges increased by N57.6 billion from N21.7 billion.

Total assets increased by 34.0% to N14.177 trillion as of December 31, 2022, from N10.578 trillion. 

Customer loans and advances increased 38.9% year on year to N5.261 trillion as of June 30, 2023, from N3.789 trillion.

Customer deposits increased 26.9% year on year to N9.042 trillion, from N7.124 trillion.

Concerning FBNH's plans to raise new capital, investors will have to rally around the table to see if the lender's decision is okay or not. As the AGM draws closer, shareholders will bring more discussion on how to move the bank forward.