FCMB Plans Debt Sale to Boost Capital

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First City Monument Bank group, FCMB plans to raise tier II debt and retain profits this year to boost its balance sheet after the adoption of stricter accounting standards impacted its capital ratios, it disclosed yesterday.

The banking group said the capital adequacy ratio for the mid-tier lender FCMB Bank, stood at 15.9 percent in 2018, down from 16.9 percent a year earlier. It added that it expected its capital to grow throughout 2019.

Nigerian banks have been adopting stricter IFRS 9 accounting standards which require lenders to model credit loss risk based on expected rather than incurred losses and has a material impact on regulatory capital requirements.

FCMB Group Plc, last week-end released its full-year 2018 results after trading hours.

Gross Earnings increased from N169 billion in 2017 to N177 billion in 2018, representing a 4.5 per cent increase year on year.

The lender’s Profit before tax jumped from N10.6 billion in 2017 to N18.4 billion in 2018. This amounts to a 73.5 per cent increase year on year.

Shares in the Lagos-listed FMCB rose 1.06 percent on Tuesday to N1.90, valuing the banking group at N37.6 billion.

FCMB said it was targeting a 5-10 percent loan growth in 2019.

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