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Fidelity Bank eyes private placement of 3.037bn unissued shares

Fidelity Bank announces result of the Private Placement

Fidelity Bank Plc will on Thursday, September 29 hold an Extra-Ordinary General Meeting (EGM) of its members, according to a notice at the Nigerian Exchange Limited (NGX) signed by the bank’s company secretary, Ezinwa Unuigboje.

At the Extra-Ordinary General Meeting, the Board of Directors of Fidelity Bank Plc will seek members authorisation to issue, by way of Private Placement, the 3,037,414,308 unissued Ordinary Shares of 50 kobo each in the share capital of the Company (being not more than 30percent of the Company’s existing issued shares and paid-up capital) to potential investors.
The members at the meeting will be expected to authorised that the Private Placement be carried out in conformity with applicable laws and subject to procurement of all regulatory approvals.

Also, the Board will also seek approval from the members that in recognition of the need to ensure that the Company’s share capital is aligned with the requirements under applicable laws, waive their pre-emptive rights in respect of the 3,037,414,308 unissued Ordinary Shares of 50 kobo each, to be issued by the Company by way of Private Placement.

The Board will also be seeking the shareholders’ approval for the said shares issued in accordance with the first resolution above rank pari-passu with the Company’s existing issued shares.

This is also in addition to the Board of Directors seeking members authorisation to perform all such lawful acts as are necessary to give effect to the above listed resolutions including but not limited to ensuring compliance with all regulatory procedures and requirements, obtaining all required approvals and filing within time, all regulatory returns in relation to the above resolutions.

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Shareholders of Fidelity Bank had at its 34th Annual General Meeting (AGM) authorised the board of directors, to undertake as it deems appropriate and in accordance with applicable laws, any actions, business combinations or transactions, including but not limited to investment, acquisition, restructuring, capital raising, expansion or business arrangement required to secure a competitive advantage for the Company.

Fitch Ratings recently upgraded the bank’s long-term issuer default rating (IDR) from ‘B-’ to ‘B’, reflecting the bank’s increased creditworthiness as well as its National Long-Term Rating to ‘A(nga)’ from ‘BBB+(nga)’.

Standard and Poor’s, another global ratings agency also upgraded the bank’s national scale ratings to ‘ngBBB/ngA-2′ from ‘ngBBB-/ngA-3’ in recognition of its resilience and performance through the cycle.

The leading financial institution recently intimated the public of its proposed acquisition of Union Bank UK as part of its expansion plans. The proposed acquisition marks Fidelity Bank’s first foray into the international market and signals yet another milestone in the bank’s increasing profile as a leading African bank.

In a regulatory filing issued on the Nigeria Exchange (NGX) on Tuesday August 30, the bank stated that it has entered into a binding agreement for the acquisition of 100percent equity stake in Union Bank United Kingdom Limited, for which the Central Bank of Nigeria has issued a letter of “No Objection”.

The transaction is however subject to the approval of the United Kingdom’s Prudential Regulatory Authority (PRA).

In the half-year (H1) to June 30, Fidelity Bank Plc recorded remarkable 21.6percent growth in profit to N21.6billion as well as decent growth in most key ratios. On the back of the positive H1 2022 performance, the board of fidelity bank approved an interim dividend of 10kobo per share, making it the first time the bank will pay an interim dividend in its 34years history.

The results released on the Nigerian Stock Exchange (NGX) showed the bank grew Total Deposits by 13.1percent year-to-date (YtD) to N2.290trillion from N2.024trillion in 2021FY, driven by double-digit growth in low-cost deposits. Low-cost deposits increased by 26.1percent YtD to N1.902trillion and now represents 83.1percent of total deposits from 74.5percent in 2021FY, which explains the drop in funding cost.

Gross Earnings increased by 37.9percent year-on-year (YoY) to N154.8billion on account of 52.9percent growth in interest income to N136.2billion from N89.1billion in H1 2021. The increase in Interest Income was driven by improved yield on earnings assets and 14.9percent YtD expansion in earnings base to N2.546trillion. .