Afriland First Bank Share Capital Increase: COBAC Approves CFAF 60B

• Afriland First Bank has increased its share capital from CFAF 50 billion to CFAF 110 billion.
• The capital increase was achieved by capitalizing CFAF 60 billion from the bank's existing reserves, not through new external funding.
• The Central African Banking Commission (COBAC) approved this share capital increase, which was confirmed by the bank on November 5, 2026.
• Shareholders had previously approved the measure at a general meeting on April 28, 2026.
• The bank did not disclose updated regulatory capital ratios or prudential indicators following the transaction.

The Central African Banking Commission's endorsement of this strategy provides a notable precedent for financial institutions operating within Cameroon, demonstrating a pathway to bolster capital adequacy without necessitating an influx of new funds.

Afriland First Bank, a prominent Cameroonian financial institution, has significantly expanded its share capital, elevating it from CFAF 50 billion to CFAF 110 billion. This substantial increase, which more than doubles the bank's previous capital base, was achieved by converting CFAF 60 billion from its existing reserves into share capital. The bank officially confirmed the completion of this strategic financial maneuver in a statement issued on November 5, 2026, following the necessary regulatory clearance.

Crucially, this capital augmentation did not involve an injection of new cash into the bank. Instead, the process entailed a reclassification of a portion of Afriland First Bank's internal reserves, effectively transforming them into share capital. This method allows the bank to strengthen its capital structure without requiring external funding, a key aspect of the transaction that distinguishes it from traditional capital raises.

The Central African Banking Commission (COBAC), the region's primary banking regulator, provided its official approval for the Afriland First Bank share capital increase. This regulatory endorsement was a critical final step, as the bank's shareholders had already given their consent for the capital expansion during a general meeting held on April 28, 2026. COBAC's role as the Central African Banking Commission is pivotal in ensuring the stability and compliance of financial institutions within its jurisdiction, making its approval a significant milestone for the bank.

Despite the substantial reclassification of funds, Afriland First Bank's total shareholders' equity remained unchanged following the transaction. The CFAF 60 billion converted into share capital represented a significant portion of the bank's available internal funds. According to financial disclosures for August 31, 2026, which were previously reviewed by Investir au Cameroun, the bank held CFAF 50 billion in share capital alongside combined reserves and retained earnings totaling CFAF 112.66 billion.

The CFAF 60 billion that was capitalized accounts for approximately 53.3% of those combined reserves and retained earnings. While the bank confirmed the completion of the capital increase, it did not release updated regulatory capital ratios or other prudential indicators. This means the immediate impact of the transaction on its regulatory standing, beyond the increased share capital, has not yet been publicly detailed.

The Afriland First Bank share capital increase COBAC approval, achieved through the capitalization of reserves, offers a compelling example for other financial institutions operating in Cameroon and the broader Central African region. This method allows banks to bolster their capital without necessitating an influx of new funds, providing a flexible approach to meeting capital adequacy requirements. Lawyers advising financial institutions in Cameroon should note this precedent, as it illustrates a viable strategy for strengthening balance sheets through internal restructuring.

Compliance officers within regulated entities should closely monitor any subsequent regulatory disclosures from COBAC or Afriland First Bank regarding the impact of this transaction on prudential ratios. Such information could offer valuable insights into future capital planning strategies and how COBAC interprets and applies Cameroon banking regulation concerning capital adequacy, particularly when reserves are leveraged in this manner.

Lawyers advising financial institutions in Cameroon should note COBAC's approval of Afriland First Bank's share capital increase through capitalization of reserves, as this sets a precedent for how capital adequacy requirements can be met without fresh funding. Compliance officers should monitor subsequent regulatory disclosures from COBAC or the bank regarding the impact on prudential ratios, which could influence future capital planning strategies for other regulated entities.

Source: Original reporting via Investir au Cameroun