Festus Akanbi and Kayode Tokede examine the total equity positions of the 10 most capitalised banks as of September 2023 ahead of the planned recapitalisation of commercial banks

For obvious reasons, the most topical issue in the Nigerian banking industry today is the planned recapitalisation of banks as announced by the Central Bank Governor, Dr. Olayemi Cardoso.

Although the details of the new threshold are yet to be released, financial industry analysts expect operators to begin without delay, moves to raise fresh capital to bolster their respective institutions’ capital base.

Cardoso, who spoke at the recent 58^th Annual Dinner of the Chartered Institute of Bankers of Nigeria said that the apex bank would be asking the DMBs to increase their capital base to service the $1trillion economy projected by President Bola Tinubu.

Market Capitalisation is one of the indices to measure how strong a commercial bank is. Other measures of strength of a bank are the value of its assets, and depositors` funds, among other things.

The planned recapitalisation, among others, is to guarantee capital adequacy and to fortify the industry for future challenges.

Incidentally, plans by some banks to shore up their capital predated the CBN’s pronouncement. The list of such banks includes First Bank of Nigeria Holdings, Wema Bank Plc, and Jaiz Bank. The three banks have proposed Rights Issues, while Fidelity Bank announced plans to raise additional capital via the issuance of 13,200 billion ordinary shares via public offer and rights issues.

There are divisions over whether the Nigerian capital market can repeat its feat of 2005 when many banks were able to raise money through public offers or not, with some analysts saying the current state of the economy might make raising adequate capital a bit of a challenge. This has raised the prospect of mergers and acquisitions when the time comes.

Below is the list of the 10 most capitalised banks as of September 2023.

• Zenith Bank – N1.92 trillion

The third quarter 2023 financial report of Zenith Bank Plc places the bank at the topmost position in terms of shareholders fund which it put at approximately N1.92trillion, as against N1.31trillion in 2022. The bank also ranks as Nigeria’s highest profit generator so far in 2023, with a pre-tax profit of N505 billion.

This eminent position was corroborated by Nairametrics, an online platform that noted that with a capital adequacy ratio (CAR) of 20.1 per cent as of September 2023, as against 19.8 per cent as of December 2022, the bank’s stability is not in question.

• UBA -N1.778trillion

Following Zenith Bank closely is United Bank for Africa, Nigeria’s second-highest profit generator this year, which is also the second most capitalised bank as of September 2023. The bank posted a total shareholders fund of N1.778 trillion as of Q3, 2023. In 2022, the figure was N922.1 billion, with a capital adequacy ratio of 28.3 per cent, whichh suggests stable financial health at the end of FY 2022

• Access Holdings – N1.64 trillion

Access Holdings is another Tier 1 capital bank with a total equity of N1.64 trillion as opposed to N1.231 trillion in 2022. With this figure, Access Holdings ranks as Nigeria’s third-largest bank in terms of capital base. Its Nigerian subsidiary, Access Bank Nigeria has a total equity of N1.208 trillion as of September 2023, which is a stable figure in case of any recapitalisation exercise.

•First Bank Holdings – N1.37trillion

The ranking in terms of capital base listed FirstBank as the fourth on the list. The Third Quarter 2023 results of First Bank Holdings released in September 2023 showed that the parent company of First Bank Limited has a total equity of N1.37 trillion. However, its commercial banking arm, First Bank Limited has a capital base of N1.287 trillion. In 2022, the holding company posted a capital of 995.7billion.

•Ecobank- N1.37trillion

The bank’s third quarter 2023 performance result submitted to the Exchange last week showed it recorded a shareholders fund of N1.373 trillion as against N935 billion in the same period of 2022, placing it at the fifth position of the most capitalised banks.

• GTCO Holdings – N1.27trillion

GTCO Holdings, the parent group of GTBank has a total equity of N1.273 trillion, a year-to-date increase of 36.7per cent from the N931 billion recorded at the start of 2023.

While GTCO’s total equity is put at N1.27 billion, this is cumulative of all the group’s subsidiaries. However, its Nigerian subsidiary, GT Bank Nigeria holds a total capital base of N1 trillion as of September 2023 which is still a substantial figure ahead of any recapitalisation exercise.

•Stanbic IBTC Holdings – N471billion

Stanbic IBTC Holdings, the Nigerian subsidiary of Standard Bank Group is the parent of Stanbic IBTC Bank and it has a capital base of N471 billion as of September 2023. Its capital was N407.7 billion in 2022.

• Fidelity Bank Plc – N411 billion

With a capital base of N410.75 billion as of September 2023 against N314.3 billion in 2022, Fidelity Bank sits in quite a comfortable place ahead of any recapitalisation exercise for Nigerian banks.

In September 2023, the bank made a foray into international banking by acquiring the UK division of Union Bank of Nigeria.

• FCMB -N373.7billion

With a capital base of N373.7 billion as of September 2023 as against N275.8 billion in 2022, FCMB ranks as the 9^th most capitalised bank in Nigeria. With a capital adequacy ratio of 16.0per cent as of December 31, 2022, FCMB’s CAR was just a little above the regulatory 15% required by the CBN.

• Sterling Financial Holdings – N165.84billion

Sterling Bank Limited is a full-service national commercial bank licensed by the Central Bank of Nigeria, and it’s a subsidiary of Sterling Financial Holdings Plc. The bank provides financial services to individuals, small businesses, and large corporations.

Sterling Bank’s capital base stood at N165.84 billion when total liabilities of N2.08 trillion were removed from total assets of N2.25 trillion. Its capital in 2022 was N154 billion. (THISDAY)

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