Shareholders of FCMB Group Plc have approved a monumental ₦340 billion capital raise during an extraordinary general meeting held on December 19, 2024, in Lagos. The approval is set to fortify the group’s banking subsidiary, First City Monument Bank Limited, ensuring compliance with the Central Bank of Nigeria’s (CBN) international banking license requirements.
This development marks a pivotal moment in FCMB’s strategic journey. The meeting, which was conducted both physically and virtually, also greenlit several critical initiatives aimed at expanding the Group’s financial capabilities.
A Vote of Confidence
Addressing stakeholders, FCMB Group’s Chief Executive Officer, Mr. Ladi Balogun, described the approval as a “critical milestone” that reflects unwavering confidence in the company’s vision.
“The endorsement of this capital raise is a testament to the trust our shareholders place in us,” Balogun stated. “It aligns with our commitment to driving sustainable growth while meeting regulatory requirements.”
The newly approved measures allow FCMB to explore a variety of financial instruments, including ordinary and preference shares, convertible securities, bonds, and loans. Shareholders also consented to an increase in the company’s authorized capital, from ₦150 billion to ₦340 billion, to support its expansion plans.
Reinvesting for Growth
As part of the approved strategy, FCMB will reinvest proceeds from the divestment of stakes in select subsidiaries into its banking subsidiary. This move is expected to strengthen First City Monument Bank Limited’s position in Nigeria’s competitive financial market.
Additionally, the Group will seek to raise up to $15 million (or its naira equivalent) through a mandatory convertible loan from select qualified investors. The company also plans to capitalize on the oversubscription of its July 2024 public offer, pending regulatory approvals.
Impressive Financial Performance
FCMB’s financial health has been robust, with the Group recording a 67% increase in profit before tax, amounting to ₦91.8 billion, in the first nine months of 2024. This follows a staggering 108% year-on-year growth reported earlier in the year.
The Group’s strong performance underscores its ability to deliver value to investors. An earlier capital raise in September was oversubscribed, highlighting market confidence in FCMB’s growth trajectory.
Shareholder Confidence
Shareholders at the meeting expressed optimism about the Group’s future, commending its consistent delivery of strong returns.
“This is a well-thought-out plan,” said a shareholder who attended the meeting virtually. “FCMB has demonstrated that it can grow sustainably while meeting regulatory demands and rewarding investors.”
The extraordinary general meeting was attended by key executives and directors of the Group, including Mr. Gbolahan Joshua, the Executive Director and Chief Operating Officer, and Mrs. Yemisi Edun, Managing Director of First City Monument Bank Limited.
Strategic Implications
The capital raise and accompanying measures come at a critical juncture for Nigerian banks, many of which face increasing scrutiny from regulatory authorities like the CBN. By meeting international banking license requirements, FCMB positions itself for long-term stability and competitiveness.
Industry analysts view this move as a proactive step that reflects the evolving landscape of Nigeria’s financial sector. “This capital injection will likely enable FCMB to pursue opportunities in emerging markets, solidify its digital banking capabilities, and expand its reach,” noted an independent financial analyst.
FCMB’s Legacy and Future
Founded in 1982 as a merchant bank, First City Monument Bank transitioned into a full-service commercial bank and has grown into one of Nigeria’s leading financial institutions. With subsidiaries spanning asset management, investment banking, and microfinance, the Group continues to innovate and expand its services.
The newly approved capital raise reaffirms its reputation as a forward-thinking institution committed to staying ahead of industry trends.
As Nigeria’s financial sector continues to navigate challenges such as inflation, exchange rate volatility, and regulatory reforms, FCMB’s bold strategy serves as a blueprint for resilience and adaptability.
With shareholders now firmly behind the plan, all eyes are on FCMB to execute this ambitious vision.
