The Nation Newspaper Banks await CBN’s decision on submitted recapitalisation plans
is currently scrutinising recapitalisation plans of banks with a view to determining the appropriateness of their plans in line with the overall objectives, timelines and general market dynamics.
In the ongoing recapitalisation, CBN uses a distinctive definition of the new minimum capital base for each category of banks as the addition of share capital and share premium, as against the previous use of shareholders’ funds. While several banks have shareholders’ funds in excess of the new minimum capital base, their share premium and share capital significantly fall short of the new minimum definition.
A source at the apex bank again confirmed The Nation’s exclusive report on the banks’ plans that there would be substantial capital raising, while mergers and acquisitions also feature prominently in several of the banks’ roadmaps. It was also learnt that the apex bank was mindful of any adverse effects in the areas of job losses and closed opportunities, noting that the plans so far did not indicate any major negative fallouts.
Most banks were adopting the “open-ended” approach to their fund raising plans, with a stated initial offer size and broad mandate that allows for absorption of oversubscriptions. Wema Bank, with a national banking licence, at the weekend announced plan to raise N200 billion in new equity funds, in a bold move that seeks to preserve the 79 years old bank as a standalone entity post recapitalisation. Wema Bank, with a share capital and share premium of N15.13 billion, has one of the smallest starting points among the banks.FCMB Group, the holding company for FCMB Limited, a commercial bank with international authorisation, plans to raise N150 billion in new equity funds.
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