Recapitalisation: FCMB plans to raise N150bn by end of third quarter
The Management of First City Monument Bank (FCMB) has disclosed plans to raise N150 billion between now and September 2024.
The Chief Executive Officer (CEO) of FCMB Group Plc, Ladi Balogun, stated this on the sidelines of the company’s Annual General Meeting (AGM) in Lagos during an interview with journalists.
According to him, the company has devised a variety of means to meet the Central Bank of Nigeria (CBN)’s new capital requirements.
He stated, “Our plans during this period will be raising N150 billion through a series of structures. It’s not going to be one straight offer obviously and, that, we expect will be concluded by the end of September.
“We have a number of options, and we can achieve our objectives through any combination of the options we have. We are fortunate that as a group we have eight companies beyond just the bank. So, it’s just the bank that we have to capitalise on.
“We also have people speaking to us on potential merger and acquisition (M&A) partnership, but there is no conclusive plan at this stage. However, if there is an opportunity that is accretive to our shareholders from an earnings perspective, we will consider such things.”
Furthermore, Mr. Balogun commented on the bank’s plan to improve the non-interest income through leveraging digital products and services which would come fully on stream in the next two years. On the rise of the bank’s loan impairment in the face of high-interest rate levels, the CEO stated that the bank will be supportive and ensure its actions will be in partnership with customers to prevent harming them in any way.
Recall that CBN, in March 2024, announced a new banking recapitalisation exercise aimed at supporting the $1 trillion economy target of President Bola Tinubu’s administration.
According to the CBN, Tier-1 international banks are expected to have a minimum capital base of N500 billion- up from N25 billion set during the last exercise about 20 years ago. National banks are expected to have a minimum capital requirement of N200 billion while regional and merchant bank’s minimum capital base was set at N50 billion.
The CBN mandated banks to ensure that in meeting the new capital requirements, retained earnings should not be calculated. Rather, it should involve the injection of fresh capital. Also, it asked banks to submit a plan to meet the new capital requirements by the end of April 2024.
FCMB has a capital shortfall of N374.7 billion to meet the apex bank’s new capital requirement to retain its international bank status. Currently, the bank’s capital base stands at N125.3 billion.
