Nigeria’s Abbey Mortgage Bank has secured approval from its Board of Directors to raise at least $62.9 million through various capital market instruments, as it pushes forward with its plan to transition from a primary mortgage lender to a regional commercial bank.
Earlier this year, shareholders gave the bank the green light to pursue this transformation, which requires meeting new regulatory capital requirements set by the Central Bank of Nigeria (CBN).
Specifically, regional banks must now maintain a minimum capital base of $31.4 million.
The capital raising plan, unveiled after the bank’s 33rd Annual General Meeting, includes issuing shares through rights issues and public offers, alongside debt instruments such as global depository receipts, commercial papers, medium-term notes, bonds, and convertible securities.
These funds may be raised in tranches or series, with terms and interest rates to be determined by the bank’s Board, subject to regulatory approval.
The Board is also authorised to take all necessary steps to execute the capital raise seamlessly.
This includes appointing professional advisers, securing regulatory approvals, allotting shares, and listing the new securities on the Nigerian Exchange Group Limited.
Abbey Mortgage Bank intends to use book-building and other financial market processes to optimise the capital raising exercise while complying with all regulatory directives.
Industry experts believe the transition will expand the bank’s reach beyond mortgage financing, increasing financial inclusion and providing broader banking services, especially in underserved areas.
The move also positions Abbey Mortgage Bank to compete more effectively within Nigeria’s fast-changing financial space.
In March 2024, the CBN revised minimum capital requirements across the banking sector, prompting several banks to turn to the capital markets for funds to strengthen their financial position.
According to the the Securities and Exchange Commission Nigerian lenders have raised roughly $1 billion in new capital within a third of the 24-month recapitalisation timeline.
As Nigeria’s regulatory landscape tightens, Abbey Mortgage Bank’s $63 million fundraise marks a key step towards meeting these new standards and supporting its regional banking ambitions.
