FBN Holdings makes capital injection of N25 billion into FirstBank to drive growth
FBN Holdings Plc has made a capital injection of N25 billion into First Bank of Nigeria Limited. The equity capital, according a statement by FBN Holdings, the parent company of FirstBank, emanated from its recent divestment from FBN Insurance Ltd. As a result of the equity capital injection, FirstBank’s Capital Adequacy Ratio (CAR) has increased to 16.53%.
Recall that in April, FBN Holdings disclosed ongoing talks with Sanlam Emerging Markets (Proprietary) Ltd over a possible sell-off of its 65% stake in FBN Insurance to the South African firm. Also in June, the holding firm informed stakeholders that it had completed the divestment process. Meanwhile, the value of the transaction was kept under wraps up until now.
FBN Holdings’ share price on the Nigerian Stock Exchange (NSE) is currently trading at N5.05 with a market capitalisation of about N181.3 billion, according to a report.
According to the holding company Secretary, Seye Kosoko, the overriding objective of the capital injection is to drive business growth, enhance efficiency, and improve overall shareholders’ value among the group.
Commenting on the development, FBN Holdings’ Chief Financial Officer, Oyewale Ariyibi, said: “The divestment has unlocked significant value embedded in the former subsidiary which is being leveraged to strengthen the core business for which the group is renowned.”
FBN Holdings reported a profit after tax of N49.5 billion for the half-year period ended June 30th, 2020, which represented a 56.3% increase when compared with N31.6 billion reported in H1 2019.
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