FBN Holdings Shrinks on Shareholders Negative Reaction to Dividend Cut
- Barbican Capital Limited owns 8.67% of shares
- Femi Otedola came second, with total 5.65%
- FBNH Lost more than 50% in Market Value
- The Bank Records N332.787 billion as FX Loss
- Board Cuts Dividend by 20%
- Broadstreet Elephant Needs N249bn for Recapitalisation
FBN Holdings Plc’s (Ticker: FBNH) market value shrank by about 11% as some shareholders reacted negatively to its board of directors decision to slash final dividend by 20%.
The financial stock is trading below 50% of its 52 week high. According to data from the Nigerian Exchange, the Marina headquartered financial institution’s market value dropped sharply to N734 billion, losing about 11% over the week.
Its market price slumped by 10.9% to N20.45 on Friday, equities index data tracked by MarketForces Africa showed. FBNH share price had surged to N43.95 this year as vested interest sought to take highest seat at its board room.
FBN Holdings become casualty of bearish play in the stock market after shareholders take the financial services group to court. After front and back negotiation, the group has recognised Barbican Capital Limited higher shareholders followed by Femi Otedola. It appears that Oba Otudeko has given up on the chairman seat.
As of Dec. 2023, its audited statement showed that Barbican Capital Limited owned 8.67% of shares outstanding in FBN Holdings. Femi Otedola came second with total 5.65% -direct and indirect shares.
After growing its earnings by about 128% year on year in 2023, FBN Holdings Plc board of directors has slashed shareholders final dividend by 20%. The Broadstreet elephant’s earnings performance would have been stronger but for huge FX loss due to large foreign currency liabilities. The group, ranked as one of top financial services companies in Nigeria, saw its net profit settle at N310.370 billion.
The amount came 127.92 % year on year above N136.173 billion net profit that the group delivered in 2022. In line with analysts’ expectations, the management proposed a final dividend of N0.40, which is 20% lower than the 50 kobo paid last year.
“A final dividend of 40 kobo for every share of N50 kobo, subject to appropriate withholding tax and approval will be paid to shareholders whose names appear in the register of members at the close of business on August 13 2024”, FBNH said in regulatory notice.
The group is expected to part with N14,358,117,116.40 as total dividend, which is 20% below N17,947,646,398 paid in 2022.
In a notice on July 7, 2023, FBN Holdings said it received a notification also dated July 7, 2023, from Honeywell Group Limited, that its affiliate, Barbican Capital, acquired 4,770,269,843 units of shares or 13.3 percent stake — indicating the return of Oba Otudeko to the financial institution he once chaired before he was sacked by the Central Bank of Nigeria (CBN) in April 2021.
Despite acknowledging Barbican Capital’s investment, FBN Holdings retained Otedola as its Board chairman. This development has set a precedent on board rule governance #FBN Holdings Shrinks on Shareholders Negative Reaction to Dividend Cut Interest Rate on Nigerian Treasury Bill Spikes to 21.45%
