Nigeria’s Biggest Development Bank Seeks $1.2 Billion of Capital

Bank of Industry, the biggest development finance institution in Nigeria, is seeking a capital injection of 500 billion naira ($1.2 billion) to bolster its capacity to lend to companies recovering from the pandemic-induced slowdown.

The lender will boost its capital by next year from 350 billion naira. The Central Bank of Nigeria will inject the funds, while a part will come from retained profit, Chief Executive Officer Olukayode Pitan, said in an interview.

“We want to be able to have more resources to continue our lending,” Pitan said. “Activities have increased and we have seen that in our books.”

Authorities in Africa’s biggest crude producer are encouraging banks to provide credit to manufacturers and agriculture industries whose businesses were hampered by the lockdowns. Firms have also been stymied by a foreign-exchange scarcity after last year’s plunge in oil prices drained Nigeria’s dollar reserves making it difficult to access the greenback to import raw materials.

The Lagos-based development bank forecasts loans will increase by as much as 20% this year. Credit expanded just 1.3% to 749.8 billion naira in 2020.

The lender started as Investment Company of Nigeria in 1959, transformed into Bank of Industry in 2001. It raised about $2.2 billion in syndicated loans last year boosting its assets by 79% to 1.9 trillion naira, according to its annual report. It plans to raise $883 million in Eurobond this year.

Source: Bloomberg