Recapitalization: Nigerian Banks Reject N4.84bn in Invalid Subscriptions

As the Central Bank of Nigeria’s (CBN) recapitalisation directive approaches, four commercial banks—Access Bank, Zenith Bank, Fidelity Bank, and FCMB Group—have completed their rights offer, raising a total of N1.02 trillion while rejecting N4.84 billion in invalid subscriptions.

These rejections were due to non-compliance with the CBN’s Capital Verification Exercise (CVE) guidelines.

The banks cited reasons such as multiple rights subscriptions, ineligible shareholders, and failure to meet the CVE requirements as grounds for rejecting these applications.

CBN Capital Verification Exercise Disqualifies N4.84 Billion Shares

The CVE serves as a regulatory mechanism by the CBN to ensure stability in the financial sector. Following the recapitalisation exercise, Zenith Bank, Access Holdings, FCMB, and Fidelity Bank reported the results of their rights issue and public offer on the Nigerian Exchange Limited (NGX), collectively securing N1.02 trillion and nullifying N4.8 billion in subscriptions.

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Capital Raised by Access Bank, Zenith Bank, and Others

• Access Bank secured N351.01 billion but dismissed N1.88 billion in subscriptions.
• Zenith Bank raised N350.46 billion and invalidated N1.04 billion worth of shares.

Access Bank disclosed that 81 applications totaling 26,775,816 shares worth N528.8 million were deemed invalid. Additionally, 68,426,263 shares worth N1.35 billion were disqualified due to non-compliance with offer terms and CBN regulations.

Zenith Bank Invalidates Five Million Shares

Zenith Bank reported that one application for five million ordinary shares was rejected under CBN directives. Additionally, 111 applications for 12 million shares were deemed invalid, along with 87,140 odd-lot shares. The bank further rejected 820 applications for 11.3 million ordinary shares, citing multiple or unverified submissions. Four applications amounting to 1.9 million shares were also disqualified.

FCMB and Fidelity Bank Subscription Rejections

• FCMB dismissed 39 applications amounting to 200.699 million shares worth N1.4 billion.
• Fidelity Bank rejected 656 applications, invalidating 23 million shares worth N213 million.

Fidelity Bank further stated that 458 applications, totaling 22,765,143 shares worth N221.96 million, were rejected due to non-compliance. Another 548 applications involving 198,320 shares were voided.

Industry Experts on Subscription Rejections

Market analysts note that share applications are typically dismissed due to incomplete information or ineligibility under CBN verification standards. Additionally, some investors may be flagged for suspicious transactions.

Further Fundraising Before 2026

With the CBN’s recapitalisation requirement in place, five commercial banks aim to raise N1 trillion by 2026. The CBN’s directive mandates that banks with international licenses meet a minimum capital threshold of N500 billion, while national and regional banks must secure N200 billion and N50 billion, respectively. These figures exclude all items except share capital and share premium within the shareholder fund section of the balance sheet.

Record-Breaking Bank Borrowing from CBN

Amid liquidity challenges, Nigerian banks reportedly borrowed a record N1.2 trillion from the CBN in a single day.