Fidelity Bank Started Recapitalisation Before CBN Made It Compulsory –Amuchie

Recently, the Central Bank of Nigeria (CBN) raised the capital base of commercial banks and set the tone for recapitalisation. But one bank that was already working on recapitalisation prior to that is Fidelity Bank Plc.

Revealing this in an interview, Fidelity Bank’s Executive Director, Chief Operations and Information Officer, Mr. Stanley Amuchie, said the bank had in August last year got its shareholders’ nod to recapitalise, only for the CBN to unveil the programme in March 2024.

He said Fidelity Bank was ahead of its competitors in knowing the right thing to do at every point in time.

He spoke on this and other things.

With CBN recapitalisation programme, which affects all banks, where you are on this?

The Central Bank of Nigeria, on March 28, 2024, announced recapitalisation for the banking industry. If you look at Fidelity Bank, we got the approval of our shareholders on August 11, 2023. That shows that, as a bank, we understand our business as well as the environment. We have done what we call Capital Needs Assessment. Based on that, therefore, we went out to seek approval of our shareholders to raise capital. And what we are trying to do is to issue 10 billion units of shares in public offering at N9.75k per share; and 3.2 billion units of shares by way of right issue to existing shareholders at N9.25k per share. That process has been in play. The signing ceremony is a step towards opening to the market. And that was why, a few days ago, on June 5, we had the signing ceremony. Of course, the processes involves getting all the parties together.

Who are these parties?

The parties will be the people at the issuing houses, the receiving banks, the reporting accountants and then the stockbrokers. Those are the people that will make up the parties to the offer. We have gone through the processes of getting all the people together, as well as prepared documents for the Securities and Exchange Commission (SEC) for approval. We have also secured approval of the Nigeria Stock Exchange Commission (NSEC) and that of the Nigeria Exchange Limited (NGX) and then held the signing ceremony. The next step is to secure the final approval of SEC to open the offer to the market. And we hope to open the offer on June 20 this year. It will be open for 28 working days. What it means is that, we will close on July 29, 2024.

It looks like you want to go into the market before others and ensure you get your shares before the competition gets stiff…

Like I said, we started this process earlier, because ours is based on strategy. This is because we are looking at our current business. We believe we had enough capital to do our business but we are looking at growth, which is why we are projecting growth. We believe that, if you want to grow, you must have what it takes. I want to liken capital to what oxygen is to human beings. If you don’t have enough oxygen, you will suffocate. Therefore, we looked at the growth process and what we needed to do, hence we started ours quite early. We didn’t wait. Remember, we were not reacting to CBN’s pronouncement. We have been very proactive about our capital base. That is what we are doing.

It seems there are some jitters, maybe not so much, but when the news about the revocation of Heritage Bank’s license came out, banking stocks dropped, people were asking questions, and now you are going to the market. How do you convince the people that Fidelity Bank is safe?

Let me say this again. Fidelity Bank Plc is very safe. This is a bank that has shown capacity and growth over the years. For instance, in the last five years, if you look at the stock, which is what we are talking about, you will appreciate the value our bank has created between May 2019 and May 2024. The value or the share price of Fidelity has grown by 507 percent or at N1.68k as at 31st of May, 2019, to N10.20k as at 31st of May, 2024. That is 507 per cent growth. What this means is that we have grown at an average of over 100 percent for every year.

You hit a new record high, over one hundred and four thousand, for the all-share index?

Yes. For all that has happened, you will see that our bank grew more than two times the all-share index. Even if you talk about the banking index, which is what tracks the value of shares of the banking industry, our bank did four times.

What are the chances of mergers, or are you looking at acquiring some banks?

Everything is on the table. For now, what we are trying to do is to get additional capital at the level where we are today. And by the time we get that, we will be in a very good position to look at what is ahead of us.

What of acquiring banks that need help, which will also increase your branches and assets?

Those are very possible. Like I said, everything is on the table for us. Our plan is to put ourselves in that position where you can think clearly and then be able to take any decision. And if we need to acquire, there has to be value. We will look at those who bring that synergy we will need. That is what we are looking at. But aside from that, we are well positioned. For the offer that is about to open, we are already getting feelers that people are seeing the investments in Fidelity and what it has done over the years. That is why they are very eager to be part of what is happening in Fidelity.

What is the major drive for capital that you are looking to get from the market?

When you are in business, at every point in your business, you need to sit back and look at where you are going to. We have seen a lot of growth in Fidelity in the last three to five years, in almost all the indices. If you look at indices like gross earnings, we’ve seen growth from N206 billion in 2020 to N556 billion in 2023 on gross earnings. That is a cumulative average growth rate of about 39 per cent. Similarly, our Profit Before Tax (PBT) grew from N28 billion to N124 billion by the end of 2023. That is a cumulative growth rate of 64 per cent. Moreso, savings accounts and deposits have also grown, significantly.

So, almost all the performance Indices have been on trajectory of growth. Therefore, you appreciate the kind of businesses you are seeing on the horizon at this moment. In this regard, what we have done, essentially, is to look at the Capital Needs Assessment, because we are getting more businesses, which is why we need to increase our capital, to be able to take on more businesses so that we do not get businesses we cannot handle. And like I said, capital in business is like what oxygen is to human beings.

Small business owners do say that commercial banks are not their friend at all. Do you think this new capital will get to small businesses?

Fidelity Bank has always been known for supporting small and medium enterprises (SMEs). Our bank has won several awards for SMEs support and there are probably only a few banks, if any, that have supported SMEs the way Fidelity has done. Our bank is more like an SMEs’ bank. We’ve grown new champions in the market and that is what we are known for. I can assure you that we will continue to do that, even better in the years ahead.

Recently, the Independent Project Monitoring Company recognised Fidelity Bank. What is the bank doing diffetently in Environmental, Social and Governance to warrant such recognition?

We are doing a lot. Today, we are one of the banks in Nigeria that have taken ESG to a greater level. We are doing a lot on the environment, staff (socials), and corporate governance. Therefore, if you talk about governance board, of course, ours is recognized as one of the strongest boards in the banking industry in Nigeria. We have people from different facets of the economy: oil and gas, investment banking and others. It goes to show that the quality of the board and its discussions are very strong. Then talk about the environment; we are doing paperless office, green financing and all. These are the things they have seen and that is why they recognised us.