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Nigeria’s Fidelity Bank to raise 127.1bn in compliance with new capital requirement

Published

6 months ago

June 7, 2024

In the bid to comply with a new minimum capital requirement for local lenders set by the central bank in March, Nigeria’s Fidelity Bank announced on Thursday that it would raise 127.1 billion naira ($88 million) via a rights issue and a public share sale.

Local lenders have begun submitting plans to fulfil the central bank’s new minimum capital requirements, which would fortify the financial system and promote economic growth, the central bank said on Tuesday.

The new law stipulates that commercial banks having international licenses need to have a minimum capital of 500 billion naira, or $345 million. To reach the new benchmark, more than 20 Nigerian institutions will need to raise additional capital in the next two years.

According to Fidelity, the capital raising plan was approved by its shareholders in August of last year, and the share sale is scheduled to begin on June 20 and terminate in July.

It stated that the offer’s proceeds would be used to fund product distribution channels, company and regional expansion, and internet infrastructure.

In recent months, Guaranty Trust Holding Plc, Access Holding, and FBN Holdings—three of Nigeria’s leading lenders—announced their intentions to raise capital.

According to the central bank, lenders require additional buffers to withstand shocks, sustain the economy, and spur growth—especially in light of the two significant devaluations of the local naira that have occurred since June of last year.

The economy has been beset by high inflation and slow development for the past ten years. In an attempt to stimulate growth, the government has raised interest rates, increased prices, and made the crisis caused by rising living expenses worse.

Related Topics:Featured Fidelity Nigeria

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IMF mission concludes 4th loan program assessment in Egypt

Published

2 hours ago

November 22, 2024

Ifeoluwa Dada

Following the completion of a recent visit to Egypt, the International Monetary Fund (IMF) has announced that its mission had achieved significant strides in policy talks aimed at concluding the fourth review of the IMF loan program.

The review is the fourth in Egypt’s most recent 46-month IMF loan program, which was authorised in 2022 and increased to $8 billion this year following an economic crisis characterised by high inflation and chronic foreign exchange shortages. It may unleash more than $1.2 billion in financing.

Along with reaffirming its commitment to maintain a flexible exchange rate system, the IMF stated that Egypt “has implemented key reforms to preserve macroeconomic stability,” including the unification of the currency rate that facilitated imports.

Earlier on Wednesday, Egypt’s Prime Minister Mostafa Madbouly said Cairo has asked the IMF to modify the targets for the programme not only for this year, but for its full duration, he added without giving more details.

“Discussions will continue over the coming days to finalize agreement on the remaining policies and reforms that could support the completion of the fourth review,” the IMF added in its statement.

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Kenya seeks $750m from World Bank, obtains $200m from AfDB— Official

Published

2 days ago

November 20, 2024

Ifeoluwa Dada

The head of debt management for the finance ministry told Reuters that Kenya had obtained a $200 million loan from the African Development Bank (AfDB) and was negotiating a fresh $750 million loan with the World Bank.

After being forced to abandon proposed tax rises costing more than 346 billion shillings ($2.68 billion) in June due to fatal demonstrations, the East African nation’s administration, which has been grappling with significant debt, has been frantically seeking fresh funding.

The Finance Ministry’s public debt management office director general, Raphael Owino, told Reuters that the IMF’s October clearance of the seventh and eighth reviews, which opened the door for a $606 million loan tranche, had aided the ministry’s talks for more loans.

“The World Bank is coming on board, riding on the back of IMF receipts,” Owino said. “The AfDB is already on board.”

The discussions for more assistance, which came under the World Bank’s “Development Policy Operations” (DPO) with the government, were confirmed by a representative at the organization’s Kenya office.

“The amount of the current (loan) is yet to be determined. The amount will also depend on the implementation of the policy reforms agreed upon,” the spokesperson told Reuters, adding that past DPO loans averaged about $750 million.

In May, the World Bank approved the latest round of DPO loans, totalling $1.2 billion.

According to a statement made last month by Finance Minister John Mbadi, Kenya has set a foreign borrowing goal of 168 billion shillings for the fiscal year ending in June 2025.