Investors are literally scrambling for shares of Fidelity Bank Plc as the leading commercial bank’s capital raising continues to gather momentum among all categories of investors.

Investors’ appetite for Fidelity Bank is shown in massive subscriptions to its on-going rights and public offers and voluminous trading at the stock market.

Current weekly report shows that Fidelity Bank was the most active stock at the stock market, outperforming the banking sector and the overall market.

Fidelity Bank recorded a turnover of 1.73 billion shares worth N18.27 billion in 1,579 deals to emerge atop the activities chart for the week.

This implies that Fidelity Bank accounted for 51 per cent and 35 per cent of total volume and value traded during the week. Total turnover for the week at the Nigerian Exchange (NGX) stood at 3.39 billion shares worth N52.30 billion in 44,814 deals.

In what underlined the fact that transactions in Fidelity Bank was driven by positive investors’ sentiment, the bank’s share price combined the huge turnover with appreciation.

Contrary to the overall negative performance of the market and the banking sector, Fidelity Bank’s share price rose by 0.05 per cent to N10.75 per share. The benchmark index that measures pricing trend for the equities market, the All-Share Index (ASI) of the NGX, closed the week down by 0.46 per cent. The NGX Banking Index, the sectoral index that measures the performance of the banking sector, had closed lower by 0.48 per cent.

The secondary market trading on Fidelity Bank’s shares underscored investment experts’ general view on the attraction of the bank’s ongoing rights and public offers. Experts have categorised Fidelity Bank as a most attractive offer, with the bank carrying the “buy” recommendation in most investment research reports.

For instance, at the on-going offer prices, Fidelity Bank is locking in immediate double-digit gain of between 11 to 18 per cent for investors in the on-going rights and public offers, a substantial immediate return that’s unique to the bank among other competitors.

Fidelity Bank had started with a N127.1 billion hybrid offer including a rights issue of 3.2 billion ordinary shares of 50 kobo each at N9.25 per share and a public offer of 10 billion ordinary shares of 50 kobo each at N9.75 per share.

With massive subscriptions and the offers clearly heading to huge over-subscription, the bank has received approvals to issue additional 8.2 billion ordinary shares to absorb potential oversubscription. Thus, the rights issue size was doubled with additional 3.2 billion shares while 5.0 billion shares were added to the public offer.

Application list for the offers closes on August 12, 2024. A minimum subscription of 1,000 shares or N9, 250 for rights issue and N9, 750 shares for public offer ensures that the generality of the people can benefit from the bank’s on-going offers.

Experts at Afrinvest West Africa said subscribing to the rights and public offers is a cheaper way as the issuing company bears the cost of transaction compared to the secondary market where the buyer pays transaction charges and levies.

Afrinvest categorised Fidelity Bank as an “opportunity” for the investing public, citing the bank’s impressive historical capital gain and performance records.

Investment experts at Arthur Steven Asset Management said investors in Fidelity Bank’s ongoing rights and public offers stand to reap about 57 per cent in capital gain over a shor- term period, putting the bank’s shares as valuable inflation-hedging assets.

Analysts at Arthur Steven Asset Management outlined that with a return on equity of 23 per cent, Fidelity Bank has consistently increased dividend payouts for the past three years, rising from 35 kobo per share in 2021 to 40 kobo and 60 kobo in 2022 and 2023 respectively.

Analysts noted that the bank has a long-to-deposit ratio of 75 per cent, which underlines Fidelity Bank’s strong commitment to supporting businesses and national economic development. Debt-to-equity ratio stands at 1.34 times, showing that the bank has no significant debt burden and thus easily, aggressive growths translate to higher returns to shareholders.

Fidelity Bank has 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.

The secondary or stock market performance has been driven by massive expansion in business operations and strong growth in profitability. Fidelity Bank has recorded an average annual profit growth of 64 per cent over the past three years.

The bank has also seen rapid expansion in customer base and assets as total balance sheet size leapt from N2.1 trillion to N6.2 trillion, the sixth largest in the Nigerian banking industry. The balance sheet was driven by a hefty total deposit of more than N4 trillion, equally the sixth biggest in the industry.

The Nigerian private sector moved back into contraction territory in July as steep price pressures hit demand and resulted in renewed reductions in both business activity and new orders.

Input costs and selling prices continued to rise rapidly, although there were some signs that efforts to secure sales resulted in a softer pace of output price inflation.

Meanwhile, confidence hit a new record low. The headline figure derived from the survey is the Stanbic IBTC Purchasing Managers’ Index (PMI). Readings above 50.0 signal an improvement in business conditions on the previous month, while readings below 50.0 show a deterioration.

The headline PMI posted 49.2 in July, down from 50.1 in June and below the 50.0 no-change mark for the first time in eight months. The index signalled a slight deterioration in business conditions as the second half of the year got underway. The renewed worsening in the health of the private sector mainly reflected the first reductions in output and new orders since November last year.

In both cases, rates of decline were only modest, however. Anecdotal evidence continued to highlight the negative impact of sharp price increases on customer demand, with clients often unwilling or unable to commit to new projects.

Three of the four broad sectors covered by the report saw business activity decrease in July, the exception being manufacturing where production increased. Selling prices continued to increase sharply at the start of the third quarter as companies passed higher input costs through to their customers. This was despite the rate of inflation easing to the slowest since May 2023 amid reports from some panellists that they had lowered charges as part of efforts to secure sales.

Muyiwa Oni, Head of Equity Research West Africa at Stanbic IBTC Bank commented: “The Stanbic IBTC headline PMI declined for the second consecutive month to 49.2 points in July – its lowest level since November 2023. Anecdotal evidence continued to highlight the negative impact of sharp price increases on customer demand, resulting in renewed reductions in both business activity and new orders. Notably, output and new orders printed below 50.0 thereby ending a seven-month sequence of expansion and reinforcing a renewed worsening in the health of the private sector. Even as output and new orders declined, companies continued to expand their staffing levels during the month.  Moreover, the rate of job creation picked up to the strongest in 2024 so far. Meanwhile, overall input prices continued to rise sharply in July with the rate of inflation quickening for the third month running and was the fastest since March.  Although output prices continued to rise rapidly during July, the pace of inflation eased from that seen in June and was the slowest since May 2023. Where selling prices increased, panelists linked this to higher input costs. On the other hand, some companies lowered charges as part of efforts to attract customers. That said, companies remained confident overall that output will increase over the next 12 months, reflecting business expansion plans including efforts to start exporting and open more branches. On a year-on-year basis, headline inflation may have peaked in June, with moderation expected in H2:24 as the year-on-year effects of PMS subsidy removal (which induced higher fuel prices) and significant currency depreciation (which accompanied the FX unification) fade.  This, in addition to the commencement of the primary harvest season in September, is likely to provide some respite for consumers, thereby likely supporting a slight improvement in domestic economic activities in H2:24.”

Further increases in purchase prices and staff costs were registered in July. Purchase price inflation quickened to a four-month high, often due to currency weakness but also higher raw material costs.

Meanwhile, the rise in employee expenses was broadly in line with that seen in June as companies continued to help workers with higher living costs, particularly those related to transportation.

The renewed decline in output was accompanied by a reduction in business confidence, with firms at their least optimistic since the survey began. That said, business expansion plans meant that firms still expect output to rise over the coming year. Companies scaled back purchasing activity, with reduced demand for inputs and prompt payments helping lead to a further shortening of suppliers’ delivery times.

Meanwhile, stocks of inputs increased. Employment also continued to rise slightly, with the pace of job creation quickening to the fastest in 2024 so far. Higher staffing levels and a drop in new orders meant that backlogs of work were cleared for the second consecutive month.

Union Bank of Nigeria, one of Nigeria’s foremost financial institutions, has added to its growing list of qualified personnel with the recent graduation of the 2024 set of Management Trainees.

The ceremony, which was held at the Bank’s multiple-purpose sports complex, ‘The Stable, ’in Surulere, Lagos, included the financial institution’s senior management officials and other staff, as well as the 166 Management Trainees graduates who successfully concluded their training programme.

After collecting their certificates, the newly graduated Management Trainees were encouraged to imbibe the technical and soft skills they learned to help them settle quickly into their new roles within the bank while upholding the tenets and core values of Union Bank.

Speaking during the event, Omayuli Wale-Ajayi, Chief Talent Officer at Union Bank, also urged the graduates to remain focused and committed to the ideals expressed in the Bank’s vision and mission statement.

Addressing the graduates, she said:

“Union Bank is always on the lookout for the best and brightest to join our existing team of highly motivated and competent employees to deliver on the strategic goals of this financial institution. We believe you represent the next generation of exceptional talent that will help the bank grow exponentially over the years to come.

“As you embark on the first steps of what I know will be a fruitful career within the bank, I encourage you to constantly keep your eyes on the big picture of helping our institution become Nigeria’s most reliable and trusted banking partner, keeping in mind also to strive to make our customer’s lives better by delivering the simplest, smartest solutions.”

The Union Bank Management Trainee Program is a comprehensive training program designed to prepare high-performing young talents to become well-rounded bankers and future leaders of the Bank.

This program is targeted at building a team of multifaceted and extraordinary individuals who are fully prepared and equipped to take on new challenges, make an impact, and work across the different aspects of the bank’s business units.

About Union Bank Plc.

Established in 1917 and listed on the Nigerian Stock Exchange in 1971, Union Bank of Nigeria Plc. is a household name and one of Nigeria’s long-standing and most respected financial institutions. The Bank is a trusted and recognisable brand with an extensive network of over 300 branches across Nigeria.

The Bank currently offers a variety of banking services to both individual and corporate clients including current, savings and deposit account services, funds transfer, foreign currency domiciliation, loans, overdrafts, equipment leasing and trade finance.

The Bank also offers its customers convenient electronic banking channels and products, including Online Banking, Mobile Banking, Debit Cards, ATMs and POS Systems.

We are pleased to announce that the Central Bank of Nigeria has approved the framework for the merger between Providus Bank Limited and Unity Bank Plc, marking a significant milestone in the evolution of our respective institutions. 

This proposed merger represents a strategic and complementary union that will leverage the strengths of both banks to create a leading financial institution in the industry with footprints in retail, corporate, commercial, and digital banking.

Unity Bank Plc, with its rich legacy of over 18 years, has established a robust retail banking network, comprising more than 220 branches nationwide. With a strategic niche in the agricultural business, our commitment to delivering exceptional customer service and a comprehensive range of financial products has earned us the trust and loyalty of millions of customers.

Providus Bank Limited, on the other hand, is renowned for its innovative approach to banking, boasting a strong digital footprint, innovative products, high quality service culture and strong focus on helping customers grow. As a fast-growing new-generation bank, ProvidusBank has consistently pushed the boundaries of technology to deliver cutting-edge financial solutions that cater to the evolving needs of modern consumers.

The combination is driven by a shared vision to provide an unparalleled banking experience to our customers. By combining Unity Bank’s extensive branch network and deep-rooted customer relationships with Providus’s digital prowess and innovative spirit, we aim to deliver a seamless blend of traditional and modern banking services.

Our customers will benefit from an expanded suite of products and services, greater convenience, and improved access to banking solutions across various channels. The integration of our digital platforms will offer enhanced security, faster transactions, and a more personalized banking experience.

As we embark on this journey together, we remain committed to maintaining the highest standards of corporate governance, financial stability, and customer satisfaction. Our united team of dedicated professionals will work tirelessly to ensure a smooth transition and continued tradition of excellence in all our operations.

This combination signifies the beginning of a new chapter in our shared history, one that is filled with promise and potential. We are confident that the combined strength of both entities will create a formidable force in the banking sector, driving innovation, growth, and prosperity for our customers, employees, and stakeholders.

We extend our heartfelt gratitude to the Central Bank of Nigeria for their consideration and approval and to our customers, employees, and partners for their unwavering support.

Completing the proposed merger is subject to the final approvals of the respective Boards, shareholders, and relevant regulatory approvals. 

Signed By Management: Providus Bank Ltd and Unity Bank Plc.

Chief Executive Officer, Sterling One Foundation, Peju Ibekwe; Representative of the Lagos State Governor/Deputy Governor, Mr Kadri Obafemi Hamzat and Korede Demola-Adeniyi, ED-South, The Alternative Bank during the Africa Social Impact Summit held in Lagos recently.

The Alternative Bank, a pioneer in ethical finance, is at the forefront of driving sustainable economic growth in Africa through its catalytic capital approach. This innovative financial model was prominently featured at the recent Africa Social Impact Summit (ASIS) 2024, hosted by Sterling One Foundation and the United Nations.

Catalytic capital, prioritising social and environmental impact alongside financial returns, is deeply ingrained in The Alternative Bank’s ethos. The bank’s interest-free financing model aligns perfectly with these principles, ensuring investments not only generate profits but also contribute to societal well-being. This approach was a cornerstone of the discussions at ASIS 2024.

The summit, themed “Reimagining Progress: A New Blueprint for Sustainable Growth in Africa,” brought together influential figures from both public and private sectors. Deputy Governor of Lagos State, Obafemi Hamzat, representing Governor Babajide Sanwo-Olu, emphasised the critical role of catalytic capital in driving sustainable development.

“ASIS 2024 must catalyse collaboration and action towards sustainable development in Africa. Public-private partnerships, fuelled by catalytic capital, are essential for attracting impactful investments,” Hamzat remarked.

Korede Demola-Adeniyi, Executive Director-South of The Alternative Bank, highlighted the transformative power of catalytic capital through flagship projects such as the Lagos Rice Mill and electric transportation for women in Kano.

“These projects exemplify the power of catalytic capital and effective partnerships. By working with partners who provide concessionary financing, training, and other resources, we are making previously unfeasible projects a reality and driving substantial social impact,” she stated.

The investment panel session she spoke on, “Scaling Catalytic Capital for Sustainable Economic Prosperity” featured distinguished speakers from leading financial institutions, including Uju Okafor from Afreximbank, Adekemi Ajayi from Acumen West Africa, and Dr. Omawumi Kola-Lawal from the IFC.

Sterling One Foundation CEO, Mrs. Olapeju Ibekwe, outlined the summit’s goals, stating, “ASIS aims to build and scale partnerships, attract increased impact investment, and advocate for supportive policies.”

Through its strategic partnership with Sterling One Foundation, The Alternative Bank has demonstrated its commitment to driving impact through sustainable development and innovative banking solutions.

By actively shaping the discourse on catalytic capital, The Alternative Bank is positioning itself as a leader in Africa’s sustainable development journey.