Financial institutions in Nigeria are mobilizing capital to improve their technology and cybersecurity capabilities, with a collective commitment of $1.20 billion earmarked for these investments.
This announcement was made after five lenders' recent capital raising initiatives, as detailed in their offer prospectuses to comply with new capital requirements set by the Central Bank of Nigeria (CBN).
In March, the CBN mandated that commercial banks with international authorization increase their capital base to 500 billion Naira, national banks to 200 billion Naira, and regional banks to a minimum of 50 billion Naira.
According to PwC, a substantial capital shortfall of approximately 4.2 trillion Naira exists across all licensing categories, representing a gap of 35% to 40% of the new minimum capital requirements.
Among the banks, Guaranty Trust Holding Company (GTCO) has allocated the largest share for technology investments. GTCO plans to issue nine billion ordinary shares at 44.50 Naira each to raise about 400.5 billion Naira.
Of the anticipated net proceeds of 392.49 billion Naira, 94.3% (370 billion Naira) is designated for the recapitalization of its banking subsidiary, GTBank. Notably, GTBank intends to allocate 98.5 billion Naira specifically for technology infrastructure upgrades.
Access Holdings has also committed 20% of its net proceeds from a rights offering (343.09 billion Naira) to IT infrastructure improvements, with planned investments of 41.17 billion Naira in network upgrades and 27.48 billion Naira in cybersecurity enhancements, totaling 68.62 billion Naira for IT.
Zenith Bank Plc has indicated that its offering proceeds will support a comprehensive overhaul of its IT infrastructure with 99.27 billion Naira allocated for technology investments.
Fidelity Bank plans to invest about 19.01 billion Naira in IT infrastructure, which constitutes 20% of its total proceeds. FCMB Group has the lowest budget for technology among the reviewed banks, with 16.22 billion Naira set aside for IT infrastructure and cybersecurity improvements.
