First Bank Hybrid Offer Oversubscribed
First Bank of Nigeria Plc has recorded another milestone in the history of capital issue in the Nigerian capital market as broken at the 38th yearly general meeting of the bank held in Abuja . The Bank recently issued 3.1 billion new shares made up of rights of 1.5 billion and offer for subscription of 1.6 billion ordinary shares of 50kobo each at N31 and N33 per share respectively in a bid to raise N100 billion through hybrid offer,ended up raising N500 billion at the end of the offer.This represents an oversubscription of 400 per cent.
Alhaji Umaru Mutallab, chairman of the bank said the proceeds of the offers would be used to deepen the bank’s retail infrastructure in Nigeria through the expansion of branch network, strengthen subsidiaries capital base to support business growth, expand First Bank’s capital resources to selectively exploit value creation opportunities in the regional financial markets and elsewhere, especially in Africa, Middle East and Asia and to also support enlarged operations and broaden markets management capabilities.
He remarked that the feat accomplished by the bank in the financial services sector arose from the bank’s unique experience and history, which had helped shape contemporary realities in the nation’s financial services industry, adding that it is of interest that with more than a century of successful operations, First Bank, like the vintage wine, gets better with age, a development which has made it a national icon and a strategic international player.He noted that the bank has continued to engage in constructive economic and social activities through proactive and dynamic disposition, dedicated to the well-being and future of the country that it has ceaselessly delighted its customers and other stakeholders.
He said FBN is a clear reference point as a one-stop financial supermarket for a wide range of local and international customers.He promised the existing and potential investors that the board and management of the bank of the bank would not let them down in terms of their expectations from the bank, noting that they shall continue to institutionalize corporate integrity, excellent customer service and a self-reinforcing wealth creation process as well as remain committed to the development of the Nigerian economy.
Dr. Faruk Umar , president of the Association for the Advancement of the Rights of Nigerian Shareholders (AARNS) observed that the concern of investors is how much the bank would retain, noting that the investors do not want their money to be returned.He advised the bank to take advantage of the oversubscription to acquire some bank with low capitalisation.
Asiwaju Akintunde Asalu, president of Nigeria Shareholders Solidarity Association (NSSA) also advised the bank to work towards keeping all the money, otherwise in another three years, it would be back to the capital for fresh capital issue because of the increasing competition in the banking industry.But Brigadier Emmanuel Ikwue (rtd), chairman of the Coordinating Committee of the Zonal Shareholders Association cautioned the board of the bank against retaining all the proceeds of the capital issue because of its negative impact on returns on investment.
Mr. Jacobs Ajekigbe, managing director and chief executive of First Bank in his response to the shareholders comments said the board of the bank would be guided by return on equity in taking decision on how of the oversubscription would be retained. He said the board would review the shareholders’ suggestions and come up with a position on the issue. During the financial year ended March 30, 2007, First Bank reported gross earnings of N90.3 billion compared with N67.4 billion in 2006 while its profit after tax stood at N20.4 billion compared with N17.4 billion in 2006.The shareholders approved a dividend of N1.00 per share and a bonus issue of one for every six held by them as at August 17, 2007.
Alhaji Umaru Mutallab, chairman of the bank said the proceeds of the offers would be used to deepen the bank’s retail infrastructure in Nigeria through the expansion of branch network, strengthen subsidiaries capital base to support business growth, expand First Bank’s capital resources to selectively exploit value creation opportunities in the regional financial markets and elsewhere, especially in Africa, Middle East and Asia and to also support enlarged operations and broaden markets management capabilities.
He remarked that the feat accomplished by the bank in the financial services sector arose from the bank’s unique experience and history, which had helped shape contemporary realities in the nation’s financial services industry, adding that it is of interest that with more than a century of successful operations, First Bank, like the vintage wine, gets better with age, a development which has made it a national icon and a strategic international player.He noted that the bank has continued to engage in constructive economic and social activities through proactive and dynamic disposition, dedicated to the well-being and future of the country that it has ceaselessly delighted its customers and other stakeholders.
He said FBN is a clear reference point as a one-stop financial supermarket for a wide range of local and international customers.He promised the existing and potential investors that the board and management of the bank of the bank would not let them down in terms of their expectations from the bank, noting that they shall continue to institutionalize corporate integrity, excellent customer service and a self-reinforcing wealth creation process as well as remain committed to the development of the Nigerian economy.
Dr. Faruk Umar , president of the Association for the Advancement of the Rights of Nigerian Shareholders (AARNS) observed that the concern of investors is how much the bank would retain, noting that the investors do not want their money to be returned.He advised the bank to take advantage of the oversubscription to acquire some bank with low capitalisation.
Asiwaju Akintunde Asalu, president of Nigeria Shareholders Solidarity Association (NSSA) also advised the bank to work towards keeping all the money, otherwise in another three years, it would be back to the capital for fresh capital issue because of the increasing competition in the banking industry.But Brigadier Emmanuel Ikwue (rtd), chairman of the Coordinating Committee of the Zonal Shareholders Association cautioned the board of the bank against retaining all the proceeds of the capital issue because of its negative impact on returns on investment.
Mr. Jacobs Ajekigbe, managing director and chief executive of First Bank in his response to the shareholders comments said the board of the bank would be guided by return on equity in taking decision on how of the oversubscription would be retained. He said the board would review the shareholders’ suggestions and come up with a position on the issue. During the financial year ended March 30, 2007, First Bank reported gross earnings of N90.3 billion compared with N67.4 billion in 2006 while its profit after tax stood at N20.4 billion compared with N17.4 billion in 2006.The shareholders approved a dividend of N1.00 per share and a bonus issue of one for every six held by them as at August 17, 2007.
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