Analysts react as Fidelity Bank expands share capital amid market optimism

Financial analysts have weighed in on Fidelity Bank’s capital expansion, highlighting its potential impact on the bank’s market position.

The Bank significantly increased its issued share capital by adding 20,000,000,000 ordinary shares at N0.50 each, raising its total share capital to N36.7 billion following approval of a resolution at the bank’s Extraordinary General Meeting (EGM) held on February 6, 2025.

The decision was officially disclosed on the Nigerian Exchange Group (NGX) and signed by the company secretary, Ezinwa Unuigboje.

The issued capital surged from N26.7 billion, previously divided into 53,400,000,000 ordinary shares of N0.50, to N36.7 billion with the creation of an additional 20,000,000,000 ordinary shares of N0.50 each.

Additionally, the Board resolved that up to 20,000,000,000 ordinary shares would be issued through one or more private placements, limited to 30 per cent of the company’s existing shares, to strategic investors selected by the Board, which will determine the pricing, timing, and other relevant terms.

“This increase in share capital is a clear indication of Fidelity Bank’s long-term growth strategy. It enables the institution to attract more investors, enhance liquidity, and strengthen its balance sheet,” remarked Olumide Ayodeji, a financial analyst at Afrinvest.

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A leading investment strategist, Kemi Olatunji, also noted, “Given the bullish trend in Fidelity Bank’s stock performance, this move is well-timed. The expansion will not only improve the bank’s financial capacity but also attract institutional investors looking for promising banking equities.

Fidelity Bank recorded an impressive year-to-date performance of 60.55 per cent in 2024. The stock, which opened at N10.65 in 2024, experienced stagnation in the first quarter and dropped to N9 by April. However, a turnaround began in May, and by September, the stock crossed the N13 mark, closing at N13.90.

The bullish momentum continued throughout the year, with Fidelity Bank’s stock price closing at N17.50 in December 2024, supported by a market volume of 530 million shares.

The upward trend has persisted into 2025, with the stock closing January 2025 at N19.45 and a market volume of 292 million shares.

With the approval of the capital expansion, the Board of Directors has been tasked with implementing all decisions made during the EGM. These include executing necessary documents, appointing financial advisors, securing regulatory approvals, and ensuring compliance with filing requirements.

Market experts anticipate that this move will position Fidelity Bank for sustained growth, increased investor confidence, and stronger capital reserves, further solidifying its place as a leading player in Nigeria’s banking sector.