Nigeria’s Access Bank raised 41.71 billion naira ($210 million) through a rights issue meant for expansion of branches as well as lending, sending its shares rising.
In a document released on Tuesday, the lender said the rights issue was 79.3 percent subscribed by shareholders and came in below its target of 52.6 billion naira.
The bank had offered 7.62 billion shares at 6.90 naira per share to its existing shareholders at one for three shares in a rights issue in January.
Investors cheered the rights issue, sending the lender’s shares 2.44 percent higher on Tuesday to 4.20 naira per share.
“It was great news that the bank was able to get away with a decent result considering the extreme tough market conditions prevalent at the time of the offer,” Soji Solanke, banking analyst at Renaissance Capital, said.
Solanke said many offshore investors are averse to risk in Nigeria as a result of falling oil prices and unresolved issues around the value of the local naira currency.
“Many investors actually expect that the naira should be weaker and this constrained investment flow to the economy,” Solanke said.
The central bank in February pegged the currency at the rate of 197 to the dollar to prevent it from falling in tandem with global oil prices.
Access bank had previously said it plans to increase lending to the small business sector and retail segment of Nigeria’s economy from the proceeds of the rights issue.