Fidelity Bank Plc’s combined N127.1 billion rights and public offer have struck early success as enthusiastic shareholders mobilise to pick their pre-allotted shares and buy more stakes in Nigeria’s most-widely owned commercial bank.
Shareholders said they would pick their rights and buy more shares from the public offer in a massive show of support and positioning in the bank.
In separate interviews, shareholders across Nigeria’s leading shareholders’ associations, said the pricing of the highly discounted rights issue and public offer, the operational growth of the bank over the years, dividend records and capital gains were attractions to buy more stakes in the bank.
Fidelity Bank is one of the few companies that pay dividends twice a year at the stock market. The bank had delivered an average annual capital gain of more than 100 per cent over the past five years and ranked among the elite stocks with the highest corporate governance rating at the Nigerian stock market.
Shareholders said they envisioned that a post-recapitalisation Fidelity Bank would deliver higher returns and continue to be a leading preserver of values for shareholders’ wealth.
Fidelity Bank is offering a rights issue of 3.2 billion ordinary shares of 50 kobo each at N9.25 per share. The bank is also simultaneously offering 10 billion ordinary shares of 50 kobo each to the general investing public at N9.75 per share.
The acceptance and application lists for the rights issue and public offer, which opened on Thursday, June 20, 2024, are scheduled to close on Monday, July 29, 2024. The rights issue has been pre-allotted on the basis of one new ordinary share for every 10 existing ordinary shares held as at the close of business on Friday, January 05, 2024.
Shareholders, under the auspices of Independent Shareholders Association of Nigeria (ISAN), Ibadan Zone Shareholders Association (IBZA), Association for the Advancement of Rights of Nigerian Shareholders (AARNS), Pragmatic Shareholders Association of Nigeria and Progressive Shareholders Association of Nigeria among others, said they were picking up their rights and mobilising supports for the bank.
The general shareholders’ endorsements represent a major boost for Fidelity Bank, which has the most diversified retail shareholders’ base among Nigerian banks.
With nearly 400,000 shareholders, no single shareholder held up to 5.0 per cent of the issued share capital of the bank. Five per cent and above are considered the material shareholding under extant laws and market regulations.
Rights issue is traditionally pre-allotted on the basis of existing shareholdings and its success, most often, depend largely on the satisfaction and enthusiasm of existing shareholders.
The shareholders’ comments came on the heels of similar positive comments by investment experts and capital market stakeholders.
President, Association for the Advancement of Rights of Nigerian Shareholders (AARNS), Dr Faruk Umar, said the enthusiasms that have greeted the combined rights and public offers suggest a strong possibility of oversubscription for both offers.
Umar, a highly experienced retail investor who sits on boards of many companies, said Fidelity Bank has several factors working in its favour including its steep growth, high returns and stable board and management.
“The performance of Fidelity Bank has tremendously increased over the past years. The bank has a very professional board with some of the best independent directorships in the banking industry. The prolific appreciation of the share price is a testimony of the confidence shareholders have in the stock of the company.
“The rights issue’s price is reasonable compared to the dividend paid recently. I am very confident that both the rights and the public offer will be oversubscribed,” Umar said.
He commended the Group Managing Director of Fidelity Bank, Dr Nneka Onyeali-Ikpe, for her strong and inclusive leadership, noting that her management style empowers and mentors staff towards the success of the bank.
National Coordinator, Independent Shareholders Association of Nigeria (ISAN), Mr Moses Igbrude, said Fidelity Bank has consistently shown strong performance and paid dividends over the years while investors have also benefited from price appreciation.
“I believe it is a good investment. As for me, I will take up my rights and equally buy the public offer. I am encouraging investors to take up their rights. The bank is solid and strong with a lot of potential to grow,” Igbrude said.
Chairman, Ibadan Zone Shareholders Association (IBZA), Mr Eric Akinduro, said the combined offer was an opportunity for investors to position for greater returns.
“The best time to invest more in Fidelity Bank is now, considering the giant strides the bank is taking to become a bigger and more formidable bank. A bank that got to N14 this year and selling its shares below N10 is a big discount for investors to increase our stakes. Considering the dividend growth of the bank, investors should not miss this opportunity because after recapitalisation, this time should be the last time the bank’s shares will sell below N10,” Akinduro, who leads the most active of the six government-promoted shareholders’ zones, said.
According to him, the banking recapitalisation period is a good opportunity for discerning investors.
“I do tell our members to prepare for the recapitalisation of banks and use the opportunity to increase our stakes for good dividend yield and capital appreciation. I’m quite sure that the Fidelity Bank’s offers will be 100 per cent successful considering the future of the bank,” Akinduro said.
National Coordinator, Progressive Shareholders Association of Nigeria, Mr. Boniface Okezie, said investment in Fidelity Bank has proven to be all positives for investors, with good immediate returns and long-term capital appreciation.
According to him, a good investment serves the dual purpose of helping the investors with good stream of incomes and preserving long-term value.
“I will take my right issues in Fidelity Bank, considering the bank’s performance over the years. It has been delivering delivered excellent returns to investors. We’ve not regretted putting our hard-earned money in the bank. That is the reason why I’m going to reinvest more into the bank for further incomes into my pocket, because we are seeing higher dividends from the bank year in year out. That is what average investors look out for before making their decisions to invest into any company, first and foremost,” Okezie said.
National Coordinator, Pragmatic Shareholders Association, Mrs. Bisi Bakare, said Fidelity Bank’s impressive returns make it attractive stock for existing shareholders and others.
She described the bank as proactive, adding that the bank has been consistent in growing its operations and delivering values to shareholders.
“As an investor and shareholders’ leader, I’m going to take my rights allocated to me and even request for more shares. All my members are going to do the same. Our association is very pleased with the hybrid offer because Fidelity Bank is a good and proactive bank.
“Fidelity Bank has consistently been paying dividends. Last year, they paid both interim and final dividends. Investors always look forward to returns on their investment and we have been getting good returns on our investments. We are fully in support of the hybrid offer, especially given the price of the rights issue. I will take my rights fully and ask for more,” Bakare said.
