Infinity Trust Mortgage Bank gets shareholders' nod to raise ₦50bn

Shareholders of Infinity Trust Mortgage Bank Plc have approved a plan to raise up to ₦50 billion in fresh capital, the bank said after an extraordinary general meeting (EGM) held in Abuja on Tuesday.

The money can be raised through one or a combination of a rights issue to existing shareholders, a private placement to strategic investors, or an offer for subscription to the public. The board will decide the proportions, prices and terms, subject to approval by regulators.

Shareholders also authorised the directors to increase the bank's issued share capital and to amend its Memorandum and Articles of Association to fit the new structure. The new ordinary shares will be listed on the Nigerian Exchange Limited (NGX) and will rank equally with existing shares.

In a separate resolution, the meeting approved the conversion of 600 million preference shares of ₦1 each, valued at ₦600 million, into ordinary shares. The conversion ratio and price will be set by the directors, again subject to regulatory approvals.

Why the bank wants more capital

Managing Director Luqman Bakare said the raise is meant to position the bank for opportunities in a financial sector that keeps growing as the Federal Government pursues its target of a $1 trillion economy by 2030.

He said the mortgage banking sub-sector remains small compared with the rest of the financial system, noting that microfinance operators combined are now somewhat bigger than mortgage banks.

Bakare also pointed to the Central Bank of Nigeria's (CBN) recapitalisation of commercial banks, which raised minimum capital to ₦200 billion for national banks and ₦500 billion for those with international authorisation. He said mortgage banks expect similar requirements eventually, and Infinity wants to be ready before any such announcement.

"While that is still being awaited, we felt the need to rise to that challenge," he said.

According to him, banks in the sector compete for funds in the same market, so a stronger capital base would help Infinity mobilise more money, finance more transactions and improve returns for shareholders, including minority investors.

The bank did not give a timeline for completing the exercise in the resolutions presented at the meeting.

New board nominees

Shareholders also considered two nominees for non-executive director roles, each for a renewable four-year term, subject to ratification and CBN approval.

They are Hajia Aisha Ibrahim Rufai, an agricultural development advocate and public-sector administrator who currently serves as executive director for Commercial and Industrial Development at the North Central Development Commission, and George Leonard Adah Onazi, a former CBN director who spent more than 33 years at the apex bank before retiring in 2018.

The meeting was presided over by board chairman Nkechi May Bibilari and held electronically in line with the Business Facilitation (Miscellaneous Provisions) Act 2023.

What happens next: The board will choose how to raise the money and seek approvals from the relevant regulatory authorities, including the CBN, before the new shares are issued and listed on the NGX.