Yemisi Izuora
Following circular by the Central Bank of Nigeria, CBN, announcing minimum capital requirements for banks in the country, the Guaranty Trust Holding Plc
plans to seek shareholder approval next month to raise up to $750 million in capital.
The GTCO, is joining other banks in bolstering capital reserves to meet new targets after the CBN, last month announced minimum capital requirements for banks to strengthen the country’s financial system and enable lenders to play a bigger role in boosting economic growth.
The Guaranty Trust Holding Plc, which owns Guaranty Trust Bank, one of Nigeria’s top tier lenders, said on Friday it would ask shareholders for permission to raise the funds at a meeting set for May 9.
Access Holdings and FBN Holdings have announced capital raising plans in the past few weeks.
More than 20 banks in Nigeria will need to raise extra capital within two years to meet the central bank’s new threshold.
The CBN, has said lenders require extra buffers to support Nigeria’s economic growth ambitions, especially after two large devaluations in the local naira currency since June last year.
Credit ratings agency Fitch said on Wednesday that it expected a marked increase in equity issuance by Nigerian banks over the next two years and also mergers as some mid-sized or small lenders could struggle to raise capital.
Guaranty Trust Holding said it could issue shares or bonds in Nigeria or internationally to raise the funds.
Shares of Guaranty Trust Holding fell 8.70 per cent to 42 naira, underperforming the banking sector .