The Nation Newspaper How banks plan to meet recapitalisation conditions
More details were gathered at the weekend on how banks plan to achieve the new minimum capital requirements ahead of tomorrow’s deadline for banks to submit their implementation strategies for the recapitalisation to the
Under the recapitalisation plan, banks are required to submit step-by-step activities, transactional details, instruments and other options for their recapitalisation to the apex bank not later than April 30 . The plans will cover the two-year compliance period ending March 31, 2026. The implementation strategies indicated that most banks, currently more than two-thirds, plan to undertake equity capital raising, with rights issue the first option as existing major investors seek to protect their controls. There were few considerations for dividend conversion option, an existing practice that allows shareholders to elect to convert their cash dividends to equities, subject to regulatory approval.
Large banks are raising more funds to play in competitive acquisitions market, when the recapitalisation hits a heat in the second half of 2025.Already, shareholders of Access Holdings have approved the company’s plan to raise $1.5 billion and N365 billion in a multi-tranche, multi-currency and multi-instrument capital raising plans. Access Holdings is expected to lead with the rights issue of N365 billion, which allows the company to surpass its target of N500 billion new minimum capital base.
Shareholders of UBA are also scheduled to meet next month at their annual general meeting to consider and approve a multi-tranche, multi-instrument capital raising programme that allows UBA to substantially raise more than necessary to surpass the new minimum capital base. The bank plans to increase its share capital from N17.1 billion of 34.2 billion ordinary shares of 50 kobo each to N22.5 billion of 45 billion shares through the creation of 10.8 billion new ordinary shares of 50 kobo each.
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