FCMB to raise N150bn in additional capital

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The FCMB Group has revealed that it would be seeking shareholders’ approval to raise about N150bn in additional capital.

This was disclosed in its notice of its Annual General Meeting filed with the Nigerian Exchange Limited on Wednesday.

This came weeks after the Central Bank of Nigeria directed Deposit Money Banks to recapitalise with banks with international licences expected to raise theirs to N500bn.

To meet the requirement, the CBN gave the banking sector three options, including the issuance of new common shares (by way of public offer, rights issues, or private placements), mergers and acquisitions, and the upgrade and downgrade of their respective licence category or authorisation.

Several banking groups, like Access Holdings, FBN Holdings, Guaranty Trust Holding Company Plc, Zenith Bank and United Bank for Africa, have announced plans to raise funds from both the domestic and international capital markets.

The board of FCMB Group, in the AGM notice, said that shareholders would be required to ratify the N150bn capital raise.

Shareholders would also have to vote on the resolution to increase the issued share capital of the group from N9.90bn divided into 19,802,710,781 ordinary shares of 50k each to N19.80bn divided into 39,605,421,562 ordinary shares of 50k each by the creation and addition of 19,802,710,781 ordinary shares of 50k.

Also, the establishment of an Employee Share Option Program would be tabled before shareholders.

Meanwhile, the banking group, which released its audited report for 2023, recently declared N104.4bn in profit before tax, indicating 186 per cent year-on-year growth, with divisions of the group recording robust earnings growth; banking group at 212.6 per cent, consumer finance at 67.3 per cent, investment management at 40 per cent, and investment banking at 89.7 per cent.

The gross revenue of FCMB Group rose by 82.5 per cent to N516.4bn from N283bn, driven by a 61.7 per cent growth in interest income and a 154.4 per cent growth in non-interest income.

Net interest income grew by 44.8 per cent from N122bn to N176.6bn last year, on the back of growth in the yield on earning assets.

Increases in personnel costs, regulatory costs, technology-related costs, and general inflationary pressures pushed the banking group’s operating expenses up by 38 per cent year-on-year to N157.2bn.

Its digital revenue improved by 62.4 per cent in 2023 to N60.3bn from N37.1bn in the previous year.