Nigeria's GTCO to raise $750m on NGX, London Stock Exchange

AFRICAN STOCKS AND FINANCEMay 20, 2024 at 11:53 PM UTC

TLDR

GTCO, the parent company of Guaranty Trust Bank, is planning to list more shares on the Nigerian and London Stock Exchange to raise $750 million for a new working capital requirement.
The bank subsidiary is aiming to exceed the ₦500 billion threshold set by the Central Bank, with over 20 banks in Nigeria needing additional capital to meet the new requirements.
The structure of the share and bond issuance is pending, highlighting the banking sector's need for capital to comply with regulatory changes.

GTCO, the holding company of Guaranty Trust Bank, plans to list additional shares on the Nigerian and London Stock Exchange to raise $750 million.

The banking subsidiary, which has a market capitalization of ₦840 billion, is undertaking this share sale to meet and surpass a new working capital requirement of ₦500 billion, adjusted by the Central Bank in February 2024.

The structure of the share and bond issuance is yet to be determined. More than 20 banks in Nigeria will need to raise additional capital within the next two years to meet the central bank's new threshold.

Key Takeaways

Nigeria's banking regulator has indicated that lenders require extra buffers to support Nigeria's economic growth ambitions, particularly following two significant devaluations of the local naira currency since June of last year. Credit ratings agency Fitch anticipates a notable increase in equity issuance by Nigerian banks over the coming years. In addition, there may be mergers among mid-sized or smaller lenders that could struggle to raise the necessary capital. Guaranty Trust Holding may issue shares or bonds either domestically or internationally to meet these requirements.

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