NGX | Banking Sector Update - Nigerian banks expected to recapitalise

    The stricter requirement that banks are to meet the new capital thresholds with paid-up share capital and share premium only leaves our coverage names in a capital shortfall position. This exclusion of other forms of capital is quite significant given that these other sources account for c. 76.0% of total equity across our coverage. Specifically, the capital of our coverage banks comprises AT-1 (1.7%), retained earnings (27.4%), issued share capital & premium (24.0%), and other reserves (47.1%).

    Given the new capital requirements, we expect a lot of equity raises through the prescribed options of private placements, right issues, offers for subscription, and mergers & acquisitions. A few banks may also have to switch licences of authorisation to reduce the burden of compliance. Prior to the CBN's announcement, ACCESSCORP announced a planned capital raise of N365 billion, which comes after FIDELITYBK's private placement and FBNH's proposed N150 billion capital raise.


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    CardinalStone is a full service investment banking firm with a vision to build a world class investment banking firm of African origin; operating out of Lagos, Nigeria. The firm was incorporated in April 2008 and began operations in June 2008. CardinalStone is duly registered with the Securities & Exchange Commission in Nigeria to carry on business as an Issuing House, Fund Manager and Broker/Dealer The Firm's activities are carried out across five business units: Asset Management, Investment Banking, Private Equity, Securities Trading and the Business Support Group.
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