Stanbic IBTC Holdings Plc has unveiled plans to allocate 96.3 per cent of the N148.7 billion raised from its rights issue to bolster its banking subsidiary.
This strategic move underscored the group’s commitment to driving economic development through investments in critical sectors of the Nigerian economy.
The rights issue, comprising 2.94 billion ordinary shares priced at N50.50 each, was offered on a five-for-22 basis to existing shareholders.
At the ‘Facts Behind the Issue’ presentation at the Nigerian Exchange Limited (NGX) held in Lagos yesterday, the Acting Chief Executive Officer, Stanbic IBTC Group, Kunle Adedeji said while 96.3 per cent of the rights issue proceeds would be deployed into the banking subsidiary, 42 per cent would target the Corporate and Investment Banking (CIB) to boost counter-cyclical sectors such as manufacturing, power, agriculture, and telecommunications.
He said 27 per cent of the proceed would be allocated to its Business and Commercial Banking (BCB) to support SMEs and commercial enterprises, especially in general commerce while 11 per cent would be utilised for Personal and Private Banking (PPB) to improve credit access for individuals and enhance financial inclusion.
Adedeji stated that these allocations align with Stanbic IBTC’s mission to support industries critical to Nigeria’s economic growth, noting that the financial sector is central to achieving the country’s $1 trillion economy target.
He said the bank also to invest 14.11 of the proceiled in IT infrastructure upgrade, including modernising cyber and information security systems to enhance operational resilience and customer experience.
“Additionally, 2.22% will fund the expansion of its distribution network, with a focus on establishing eco-friendly and technologically advanced branches.”
The rights issue follows a stellar financial performance by Stanbic IBTC for the nine months ending September 2024 as the bank recorded 95 per cent year-on-year increase in gross earnings to N650 billion with 67 per cent rise in profit after tax.
The group’s prudent risk management was reflected in a capital adequacy ratio of 15.7 per cent and a non-performing loan ratio of 3.2 per cent. Between 2019 and 2023, Stanbic IBTC delivered an average annual return of 27 per cent and a dividend payout ratio of 54 per cent.
The Chief Executive Officer of Stanbic IBTC Bank, Wole Adeniyi, described the rights issue as a strategic step to solidify the group’s leadership in Nigeria’s financial sector, encouraging shareholders to take advantage of the opportunity to increase their equity stake.
According to him, by strategically allocating its rights issue proceeds, Stanbic IBTC aimed to drive sustainable economic growth, enhance financial inclusion, and maintain its position as a leader in Nigeria’s banking industry.
Also speaking, the CEO of NGX Limited, Jude Chiemeka, urged more listed corporates to take advantage of the exchange platform to raise capital and contribute to economic development.
“Listed companies are not only better positioned to access capital for growth but also demonstrate higher levels of transparency and tax compliance, which significantly benefits the economy.
“Sectors like manufacturing, telecommunications, and agriculture, businesses have utilised the Exchange to raise the capital required to expand operations, innovate, and remain competitive. This has reinforced the critical role of the capital market in fostering sustainable economic growth,” he added.
