NPF Microfinance Bank obtain shareholder approval to raise capital and convert to commercial bank

In a significant move towards its transformation, NPF Microfinance Bank has obtained shareholder approval to raise capital and convert it into a commercial bank.

The decision was made at the 29th Annual General Meeting, where several crucial resolutions were passed to pave the way for this strategic transition.

One of the key resolutions passed was the increase in the bank’s issued share capital.

Shareholders Vote

Shareholders voted in favor of increasing the share capital by the number of shares necessary to meet the regulatory requirements for conversion into a Deposit Money Bank.

This is a major step toward the bank’s ability to transit to a full-fledged commercial bank.

To implement this increase in share capital, the directors of NPF Microfinance Bank were granted authorization to pass relevant resolutions.

These resolutions include determining the number of new ordinary shares to be issued, as well as allocating these shares to subscribing shareholders through public offers, rights issues, or placements.

Meanwhile, the Memorandum of Association of the bank will be amended to reflect the changes in the share capital resulting from this capital raise and allotment process.

Apart from the capital-related resolutions, the shareholders also approved the payment of a dividend. A dividend of 10k per ordinary share of 50k was recommended in the Directors’ Report for the year ended December 31, 2022.

This dividend will be payable to shareholders whose names appeared in the Register of Members as of the close of business on May 8, 2023.

Additionally, during the Annual General Meeting, new directors were appointed to contribute their expertise and guidance to the bank’s transition process.

Their appointment reflects the bank’s commitment to strengthening its leadership team with individuals who possess the necessary skills and experience to drive the successful conversion to a commercial bank.

The shareholders appointed Deloitte & Touche as the external auditors of NPF Microfinance Bank.

Optics

The approval of these resolutions marks a significant milestone for NPF Microfinance Bank as it sets its sights on becoming a full-fledged commercial bank.

NPF Microfinance Bank’s share price closed on Friday at N1.79 per share and is up 5.29% in the last year.

The share price is also up 6.6% YTD much lower than the performance of the Banking index which is up 44% YTD.

NPF Microfinance Bank currently has N10.5 billion in shareholders’ funds as of December 2022 and an outstanding shareholding of 5.99 billion shares.

To meet the minimum N25 billion requirement for banks, it will have to more than double its number of issued shares or hope that its share price increases in the coming weeks and months ahead.