Investor confidence in Fidelity Bank has been significantly bolstered, resulting in an impressive 20% surge in the bank’s stock price on the Nigerian Exchange, with shares surpassing the N13 mark by mid-September. This strong market performance follows the bank’s successful combined offer, which included a Public Offer and Rights Issue launched on June 20, 2024.
The combined offer comprised 10 billion ordinary shares at N9.75 for the public and an additional 3.2 billion shares at N9.25 for existing shareholders, raising a total of N127.1 billion. Fidelity Bank’s stock entered a consolidation period from June through August, during which the offer concluded, but it has since gained over 20% month-to-date in September.
The bank has maintained a robust growth trajectory, having bounced back from a dip below N2 in August 2018. Since then, Fidelity Bank’s stock has surged by more than 680%. The bank started 2024 trading at N10.85 with 900 million shares exchanged. However, recapitalization uncertainties among major Nigerian banks led to a temporary dip to N9 per share in April. Despite this, the stock regained momentum, rebounding from its low of N9.00.
Following the successful conclusion of the combined offer in August, Fidelity Bank’s stock resumed its upward climb, gaining over 20% by mid-September. A key driver of this growth is the successful capital-raising effort, setting the stage for the bank’s next phase, including a private placement.
The combined offer, a significant event in the ongoing recapitalization efforts within the banking sector, saw immense demand. Fidelity Bank extended the offer due to this demand, selling an additional 8.2 billion shares, of which 5 billion were sold through the Public Offer and 3.2 billion through the Rights Issue. This heightened demand spurred increased market activity, with over 2 billion shares traded in June and 3 billion in July.
As the offer concluded on August 12, Fidelity Bank entered a brief consolidation phase, only to see trading activity rise sharply by mid-September. Weekly trading volumes surged to 27 million shares, pushing the stock beyond the N13.00 threshold and maintaining its upward trajectory.
In a statement to investors, Fidelity Bank’s Managing Director, Dr. Nneka Onyeali-Ikpe, OON, expressed gratitude for the overwhelming support during the capital raise. “With the conclusion of the Combined Offer, I am delighted to announce that we have met and surpassed our capital-raise target for the first phase of this exercise,” she said.
Dr. Onyeali-Ikpe extended her appreciation to the bank’s customers, new investors, and existing shareholders for their trust and commitment, stating, “We will forever be grateful for the support we received during this capital-raise exercise.”
She also acknowledged the role of the regulators, namely the Central Bank of Nigeria (CBN), Securities and Exchange Commission (SEC), and Nigerian Exchange Limited (NGX), in ensuring the seamless execution of the offer. “The CBN’s vision for recapitalizing Nigerian banks to support a $1 trillion economy, alongside the efforts of the SEC and NGX, was instrumental in the success of this phase,” she added.
As Fidelity Bank gears up for its next steps, the strong response to the combined offer is a testament to the growing investor confidence in its future prospects.
