Plans are underway at FCMB Group to seek shareholders’ approval for raising approximately N150bn in additional capital, as revealed by the company in its Annual General Meeting notice submitted to the Nigerian Exchange Limited on Wednesday.
The decision follows a recent directive from the Central Bank of Nigeria for Deposit Money Banks to recapitalize, particularly with banks holding international licenses expected to raise theirs to N500bn.
Complying with the mandate, the CBN outlined three options for the banking sector: issuance of new common shares through public offers, rights issues, or private placements; mergers and acquisitions; and license category upgrades or downgrades.
Various banking groups such as Access Holdings, FBN Holdings, Guaranty Trust Holding Company Plc, Zenith Bank, and United Bank for Africa have also announced intentions to secure funds from both local and international capital markets.
The FCMB Group’s board, as stated in the AGM notice, will seek shareholders’ ratification for the N150bn capital increase.
Shareholders will also vote on a resolution to escalate the group’s issued share capital 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, through the creation and addition of 19,802,710,781 ordinary shares of 50k each.
Moreover, the proposal for establishing an Employee Share Option Program will be presented to the shareholders.
Recently, the banking group disclosed a profit before tax of N104.4bn in its 2023 audited report, marking a significant growth of 186 per cent year-on-year. Notably, different divisions of the group showcased substantial 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.
FCMB Group saw a surge in gross revenue by 82.5 per cent to N516.4bn from N283bn, driven by a 61.7 per cent rise in interest income and a 154.4 per cent increase in non-interest income.
Last year, net interest income of the group grew by 44.8 per cent, moving from N122bn to N176.6bn, primarily due to the growth in the yield on earning assets.
Operational expenses for FCMB Group surged by 38 per cent year-on-year to N157.2bn, attributed to increments in personnel costs, regulatory costs, technology-related expenses, and general inflationary pressures.
Digital revenue of the group marked a notable improvement, witnessing a 62.4 per cent increase in 2023 to N60.3bn from N37.1bn in the preceding year.