Stanbic IBTC aims to carry out a N20.4bn ($102.6m) rights issue this year and seek shareholders’ vote to distribute a scrip dividend to boost its capital base, the lender has said.
The Chief Executive Officer of the company, Sola David-Borha, was quoted by Reuters as saying that she expected increased regulatory pressure to weigh on industry profits this year and that the bank had revised its 2015 loan growth down to 10 per cent, the lower end of its guidance range.
Loans have grown 4 per cent in the first six months of this year.
The mid-tier lender said its South African parent bank Standard Bank was supportive of the cash call and that a price for the share sale would be set after regulatory approvals had been received.
“If we are successful with the scrip dividend, assuming 50 percent of shareholders go for it … together with the rights issues, we should be able to maintain adequate capital,” the bank’s Chief Financial Officer, Arthur Oginga, told an investors call.
The bank’s capital adequacy ratio stood at 10 per cent. Return on equity fell to 14.2 per cent for the first half, compared with 28.9 per cent a year ago. It forecast ROE to reach 18 per cent by year-end.
Nigerian lenders have been shoring up their balance sheets in preparation for the adoption of stricter international capital requirements, which would otherwise see capital ratios for most of them drop by between 100 and 400 basis points.
Rival lender United Bank for Africa Plc last week said it had raised N11.5bn ($57.8m) by selling new stock to existing shareholders to bolster its capital base.
Shares in Stanbic IBTC fell by 3.81 per cent to N24.79, underperforming the broad index, which ended down 0.81 per cent, its tenth day of losses.
Stanbic last week said its first-half pretax profit fell 52 per cent to N9.53bn ($47.90m) and cut its interim dividend.
The lender said the Central Bank of Nigeria rules tightening access to dollars on the official interbank market impacted its foreign currency and fixed income trading business as well as a slowdown in foreign portfolio investors.
Source : Punch