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Fidelity Bank says it is facing a capital shortfall of N194 billion related to the recapitalization directive of the Central Bank of Nigeria CBN), and plans to issue 20 billion new shares though a Private Placement which will further dilute Earnings Per Share (EPS).
The Bank had earlier launched a capital exercise to raise ₦127.1 billion through a Public Offer and a Rights Issue (the Combined Offer) to meet the ₦500 billion capital requirement by the CBN for International Commercial Banks.
The offer was 220% oversubscribed, with a total order book of ₦273.0 billion. The Bank was able to absorb ₦175.9 billion (18.2 billion shares) from the order book.
“Despite the success, the Bank still faces a capital gap of N194.4 billion, which must be closed by Q1 2026,” Fidelity Bank said.
“In view of the need to close the capital gap, the Bank’s shareholders at the Extra-ordinary General Meeting held on February 6, 2025, granted approval to issue up to 20 billion additional shares. Regulatory approval is currently being sought to issue these shares through a Private Placement exercise.”
EPS to slide further with new share issuance
Fidelity Banks Earnings Per Share (EPS) fell by 47% as at June 2025, compared to June 2024 largely due to the 56% increase in the number of ordinary shares in issue to 50.2 billion from 32 billion, as well as a fall in profit.
A further increase in outstanding shares to 70 billion (via the new Private Placement) will further erode earnings per share (EPS).
Earnings Per Share (EPS) is a key financial metric used in valuing bank stocks and other companies. It represents the profit a company generates for each outstanding share of common stock.
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