Peter OBIORA InvestAdvocate
Lagos (INVESTADVOCATE)-Nigerian lender Access Bank Plc has been liaising with local investors of the bank over the week past to gauge their interest in a proposed rights issue of about N60- N70 billion by the fourth quarter (Q4) of 2014, Reuters quoted a fund manager knowledgeable to the deal.
The report quoted the fund manager who said Access Bank which raised $400 million in Eurobond in June of this year is seeking to shore up its capital base so as to meet up regulatory requirements.
According to the report, banks in Nigeria have been shoring up their capital base in recent times as the sector in the review period adopts new international capital requirements.
Herbert Wigwe, chief executive officer (CEO) of Access Bank said at an analysts’ conference call last week at the presentation of the bank’s half-year 2014 report that he expects Nigerian banks to raise additional capital to meet up with new regulations.
However, the amount to be raised by the lender is not yet certain as its meeting with stakeholders to determine such.
Similarly, there are hints that other Nigerian lenders such as First Bank of Nigeria, United Bank for Africa Plc and Skye Bank Plc may follow suit in shoring up their capital base to meet up regulatory requirements.
Reuters quoted Adesoji Solanke, banking analyst at Renaissance Capital as saying that most banks had seen capital levels drop by 100-400 basis points to near the regulatory minimum of 16 percent under the stricter international requirements, ‘’ some would have to lower dividends and loan growth this year to conserve cash,’’ Solanke said.
This is coming on the heels of a concluded N50. 3 billion rights issue by Diamond Bank Plc which issued a 4200 million Eurobond in May. While, Stanbic IBTC Bank is seeking to raise N30 billion to increase its capital base.
At the close of trading Thursday on the floor of the Nigerian Stock Exchange (NSE), share price of Access Bank gained 1 kobo as it opened N9.26 and closed N9.27 climbing up by 0.11 percent.
