Stanbic IBTC targets N20.4bn rights issue

Stanbic IBTC Plc aims to carry out a N20.4 billion ($102.6 million) rights issue this year and seek shareholders’ vote to distribute a scrip dividend to boost its capital base. According to Reuters News, the bank’s Chief Executive, Sola David-Borha, said she expected increased regulatory pressure to weigh on industry profits this year and that the bank had revised its 2015 loan growth down to 10 per cent, the lower end of its guidance range.

The mid-tier lender said its South African parent bank, Standard Bank, was supportive of the cash call and that a price for the share sale would be set after regulatory approvals had been received. Stanbic IBTC posted 40 per cent drop in profit after tax for the first-half ended June 30, 2015. According to a notice from the Nigerian Stock Exchange (NSE), the statement of financial position as at the period under review showed profit after tax profit declined to N9.695 billion in 2015 as against N16.184 billion recorded a year earlier, indicating a drop of 40 per cent.

However, gross earnings rose by 11 per cent to N68.295 billion during the six-month period to June 30, as against N61.715 billion in 2014. The bank cut its interim dividend to 0.90 naira per share, from 1.10 naira last year. Following the approval of FMDQ Bond Listing and Quotation Rules by the Securities and Exchange Commission (SEC), FMDQ OTC Plc (FMDQ) had recently listed on its platform Stanbic IBTC N15.540 billion bond. The listed bond is Series 1 (Tranches A & B) 10-Year Subordinated Notes under a N150 billion, Structured Note Programme due in 2024.

The bond was the second corporate bond to be admitted on the FMDQ platform and the second of its kind on a fixed income OTC in Africa. Listing on the NSE provides opportunity for retail investors to take advantage of the fixed return on the investment grade Notes, through the primary market whilst listing on the FMDQ will provide a secondary market platform for institutional and foreign investors to trade the bond. This is coming after the pioneer listing of the N30.5 billon United Bank for Africa bond earlier in the year.