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October 21, 2007/Punch



The Securities and Exchange Commission has approved the bid of Afribank Nigeria Plc to raise N100bn from the capital market.


Afribank plans to raise the funds by offering four billion ordinary shares of 50kobo each at N25 per share. The Nigerian Stock Exchange had already given its approval for the listing of the shares after offer.


The Group Managing Director of Afribank, Mr. Sebastian Adigwe, confirmed that SEC had approved the application and the Completion Board Meeting would be held this week.


Explaining the reasons for the capital raising exercise, Adigwe said, “The first thing is that we want to be able to add more value to our stakeholders.


As you know, after the banking sector consolidation, it became very clear that size adds value.


After Nigerian banks were able to increase the size of their shareholders’ funds, you could see how suddenly the international community began to focus on Nigeria.


People began to say that Nigeria had found its correct rhythm in the banking sector and now ready to go. So, you can see that the singular act of consolidation has now put Nigeria on the map.


I think further recapitalisation by banks should be to build on that policy. This means that you need to create ample size. There are some transactions. We are doing today what we could not do in the past because of size.”


Apart from adding value and increasing size, the Afribank boss said that the bank wanted to expand its branch network from the current 250 by another 50 branches.


“We would need money to open these new branches. We need to bring in additional capital to be able to achieve that. Apart from that, we are a legacy bank. We are beginning to re-brand our branches.. With the new outlet as well as the expansion that we are embarking upon, it is very clear that we would need to upgrade our information technology systems. So part of our going to the market is also to upgrade our IT. We also need money to keep training our staff locally and internationally. If we are able to achieve all of these, the value of our shares, the value of our business, and the returns to our shareholders will improve, he said.


Despite the fact other banks and companies are either in the market or preparing to access the market for funds, Adigwe expressed confidence that rasing the N100bn would not a problem at all.


“He said, “The improved financial performance of the bank tells you what the future holds for every stakeholder. The bank was number four before now and need want to reclaim that position. If we have to assert our original position we should not be afraid to come to the market to raise capital. As a matter of fact, we have shareholders and customers of the bank who are already asking that we should reserve some shares for them.

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