Access Bank Plc (ACCESS), the Nigerian lender with offices in eight other countries, seeks to raise as much as 68 billion naira ($420 million) to fund operations and bolster cash reserves.
Shareholders will vote Oct. 13 on the proposal to sell shares to existing investors, Busola Osilaja, a spokeswoman for the Lagos-based lender, said by telephone from Nigeria’s commercial capital today. The Nigerian Stock Exchange suspended the stock until Jan. 27 to “preserve shareholders’ value” before the sale, the bourse said in a statement.
Nigerian banks are preparing to sell equity and debt after the central bank last month changed the way lenders calculate capital buffers. The West African nation is seeking to increase banks’ ability to withstand losses five years after it bought bad debt from lenders including Access Bank to save the industry from collapse.
The regulator removed some assets lenders can count as capital in preparation for the implementation of Basel II and III, while limiting Tier 2 capital to 33 percent of higher-quality Tier 1 capital, according to an Aug. 5 circular.
The bank, which has a unit in the U.K. as well as in seven African countries besides Nigeria, hasn’t set a date for the sale. Shareholders include Nigerian and international institutional investors, its website says.
“Access Bank needs to boost its common stock to be able to fund operations in the face of the central bank capital adequacy rules,” Sewa Wusu, an analyst at Lagos-based Sterling Capital Markets Ltd., said by phone. “Given the growth potential of the bank, shareholders will be eager to take up their rights to enable them to consolidate their holdings or check dilution of their investments.”
Access Bank received shareholder approval to raise $1 billion by methods including debt and equity to fund lending targeted to rise 20 percent this year, Chief Executive Officer Herbert Wigwe said April 30. The bank’s shares were unchanged at 9.59 naira at yesterday’s close in Lagos, paring this year’s decline to 0.1 percent. The Nigerian Stock Exchange All-Share Index has retreated 1.36 percent over that period.
Bloomberg
