Recapitalisation: Bank directors acquire N39bn shares

As the banking sector recapitalisation intensifies, some bank chiefs are starting to bet on their companies by increasing their stakes, The PUNCH reports.

According to an analysis of the director’s dealings with the Nigerian Exchange Limited from the end of May to June, bank chiefs have acquired about 1.86 billion shares worth about N39.32bn.

Leading the action on the exchange was the Chairman of FBN Holdings, Femi Otedola, who directly and indirectly (through Calvados Global Services) acquired about N36.35bn worth of shares in different transactions to emerge as the majority shareholder in the banking group.

According to the recently released audited result of the bank, Otedola held 40,033,982 (0.11 per cent) directly and 1,989,342,376 units (5.54 per cent) as of December 2023, lower than the 3,110,400,619 units (8.67 per cent) directly held by Barbican Capital Limited, a company related to businessman and former Chairman of the bank, Oba Otudeko.

With his latest acquisition, he has become the largest shareholder of the banking group, the country’s oldest lender and a strategically important bank.

The Zenith Staff Provident Fund resumed its share-acquisition spree this year and in June, it acquired about 45,323,696 units of Zenith Bank’s shares worth about N1.58bn at prices ranging between N35.75 and N32.87 per unit.

The staff fund is one of the active players in the shares of the bank.

Also in June, directors and members of the management of Sterling Financial Holding Company staked claims in the shares of the company to the tune of N327.79m.

The Executive Director of Sterling Bank Ltd (a subsidiary of Sterling Financial Holdings Company Plc), Tunde Adeola, purchased about 35,041,551 units of shares valued at N148.82m in four days in June.

On June 20, the Divisional Head of Business Growth and Transactional Banking, Sterling Bank Ltd, Ukachukwu Obinna, also acquired five million shares at N4.41 each.

An Executive Director of Sterling Financial Holdings Company Plc, Olayinka Oni; its Group Company Secretary, Temitayo Adegoke; its GMD/CEO, Adeyemi Odubiyi and Non-Executive Director, Suleiman Abubakar, acquired about 37,811,501 units of the group’s shares valued at N156.92m on June 14.

For Access Holdings, the Managing Director of the Tengen Family Office, Chizoba Ufoeze, bought 1.5 million units of the banking group’s shares at N19.25 per unit.

Tengen Family Office is a company related to the chairman of the board of the HoldCo, Aigboje Aig-Imoukhuede.

In May, Tengen Holdings (Mauritius) Limited, also related to Aig Imoukhuede, acquired N1.01bn worth of shares of the company.

Not left out was the Chief Executive Officer of Jaiz Bank, Haruna Musa, who bought 10 million units of the non-interest bank shares at N2.25 per unit. The deal was worth N22.50m.

In early June, the Central Bank of Nigeria revealed that banks had started to submit their recapitalisation plans.

“Our banks have begun submitting implementation plans for the banking sector recapitalisation programme in compliance with the CBN Circular reviewing the minimum capital requirements for commercial, merchant, and non-interest banks,” central bank spokesperson Hakama Sidi Ali said in a statement.

Setting the ball rolling was Fidelity Bank, which launched its N127bn rights issue and public offer at the NGX.

Meanwhile, the NGX Banking Index declined by 7.47 per cent to emerge as the worst-performing index on the local bourse as of the end of June.

Since the CBN announced the banking sector recapitulation exercise on March 28, investors have tread cautiously in the stocks, which resulted in the NGX Banking Index recording a -19.37 per cent quarter-to-date performance and a -7.47 per cent decline year-to-date.

Over the weekend, the Executive Commissioner (Operations) of the Securities and Exchange Commission, Bola Ajomale, at a webinar themed ‘Trading Rights: What Every Investor Needs to Know’ organised by the NGX, opined that rights issues could account for a larger proportion of expected capital injection in the fresh banking recapitalisation exercise.

Ajomale, whose appointment was recently confirmed by the National Assembly, said, “The capital raising might go through the rights issue process. Out of the six capital raised in the market this year, four are right issues.

The NGX’s Acting Chief Executive Officer, Jude Chiemeka, expressed similar sentiments, saying, “Right issues are one of the preferred means by which they would be seeking new capital injection to fulfil the apex bank’s requirement.”