First Bank raises CAR TO 16.5% with N25bn capital injection

First Bank Holdings has injected N25 billion into First Bank Limited in a bid to raise its capital adequacy ratio (CAR) above the regulatory benchmark of 15 percent for banks with international banking licences. The fund injected was the proceeds of the company’s divestment from FBN Insurance Limited.

Earlier in June, FBN Holdings announced the divestment of its 65 percent from FBN Insurance Limited to Sanlam Emerging Markets (Proprietary) Limited with effective divestment date being June 1, 2020.

The recent injection in Nigeria’s oldest commercial bank came at a time the bank’s CAR hovered around the regulatory threshold of 15 percent. In FY2019, First Bank’s CAR was 15.5 percent but the latest capital injection increased this benchmark to 16.5 percent.

Nevertheless, the bank’s CAR stall falls below tier-one bank’s industry average of about 22 percent. the other tier-one banks-Zenith, Access, GTB and UBA have a minimum of 20 percent CAR, indicating that additional funds might soon be injected to beat industry average.

Commenting on the latest move to strengthen First Bank, Oyewale Ariyibi, chief financial office of the company said the overriding objective was to optimise capital across the group to drive business growth, enhance efficiency and improve overall shareholders’ value.