Nigerian Lender GTCO Raises $136M in First Phase of Recapitalization

AFRICAN STOCKS AND FINANCEJanuary 7, 2025 at 11:42 PM UTC

TLDR

Guaranty Trust Holding Co. raised 209 billion naira ($136 million) through a local share sale
This is part of its recapitalization efforts to comply with new industry rules
The Central Bank of Nigeria increased minimum capital requirements for banks tenfold in March 2023

Guaranty Trust Holding Co., Nigeria’s largest lender by market value, raised 209 billion naira ($136 million) through a local share sale.

This is part of its recapitalization efforts to comply with new industry rules. The bank plans a second phase this year, targeting foreign investors to raise the remaining funds.

The Central Bank of Nigeria increased minimum capital requirements for banks tenfold in March 2023, giving them two years to comply. Guaranty Trust aims to raise 392 billion naira to recapitalize its flagship subsidiary, Guaranty Trust Bank Ltd., and fund broader expansion.

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Key Takeaways

The Central Bank’s move to bolster the banking sector against economic shocks has triggered a wave of recapitalization. Guaranty Trust requires an additional 362 billion naira to meet thresholds for international banks, while competitors like Access Bank recently raised 351 billion naira in a rights issue to ensure compliance. As high inflation, currency devaluation, and weak economic conditions persist, these recapitalization efforts are critical to maintaining stability in Nigeria’s financial system and enabling banks to pursue growth opportunities both locally and internationally.

Finance

Stocks

GT Bank

GTCO

Central Bank

Guaranty Trust Holding Co.

Bank Recapitalization

Central Bank of Nigeria

CBN