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Tuesday, July 5, 2022

Fidelity Bank Raises $127.3m Capital


Fidelity Bank Raises $127.3m Capital
Fidelity Bank Ghana Limited has announced the completion of its $127.3 million Capital Raising Exercise to inject more capital into the operations of the bank.

The transaction included a Tier I and Tier II capital raise of $67.3 million and $60 million respectively.

The transaction, which has been approved by the Bank of Ghana (BoG), positions Fidelity as one of the best capitalized banks in the Ghanaian banking industry.

In April 2014, Kagiso Tiso Holdings (KTH) Proprietary Limited of South Africa, Amethis Finance and Edmond de Rothschild Europportunities Management II of France invested a total of $67.3 million through a combination of ordinary and preference shares under the Tier I capital funding programme.

Following the completion of the transaction, representatives of Amethis and KTH joined the Fidelity Board of Directors.

The bank has also signed a $60 million Tier II syndicated facility agreement between Fidelity Bank and a consortium of European Development Financial Institutions (EDFI) arranged by DEG-Deutsche Investitions and EntwicklungsgesellschaftmbH from Germany.

The financing partners are DEG ($18.5 million), FMO ($18.5 million), SWEDFUND ($14 million), and the European Financing Partners S.A. ($ 9 million) with DEG as overall facility agent of the transaction.

Fidelity is currently the 6th largest bank in Ghana in terms of deposits with a balance sheet of GHS2.5 billion and a network of 51 branches and 70 ATMs.

The bank is poised to become a significant player in Ghana’s banking industry.

Managing Director of Fidelity Bank, Edward Effah said, ‘KTH, Amethis, Rothschild and EDFI’s funding is a vote of confidence in the Board and management of the bank. Our strategy is to prudently grow our asset base and become a leading bank in Ghana. ‘We welcome our investors and look forward to a long-term partnership that will complement our strategy and enhance our ability to access global markets.’

Commenting on the transaction, ERES’ Deputy Director, Pierre Rousseau said, ‘We are very pleased to be partnering with Fidelity Bank on our first investment in Africa.

‘We believe that Fidelity Bank is the best independent player in the Ghanaian banking market thanks to a culture of high customer service, efficient processes and product innovation.’

Commenting on the Tier II transaction, DEG’s Regional Director for West Africa, Andreas Voss said, ‘As SMEs represent over 90% of all registered businesses in Ghana, an ailing sector can slow down the growth of the economy, hence the need to support the sector. It is against this backdrop that DEG has been mandated by Fidelity Bank for arranging a tier II facility of up to USD 60 million and as part of it, providing a USD 18.5 million Subordinated Loan facility.

‘This is testament to Fidelity Bank being a reliable and supportive partner for local Small and Medium Enterprises.’

Fidelity Bank was advised by IC Securities (Ghana) Limited, Fidelity Securities Ltd, Bentsi-Enchill Letsa & Ankomah, Genesis Analytics, EY Ghana, PwC and Bari & Co.

(Pix saved as Edward Effah, MD of Fidelity Bank in bus)

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