FCMB Reassures Shareholders Following CBN Directive on Regulatory Forbearance

First City Monument Bank (FCMB) has responded to the recent directive from the Central Bank of Nigeria (CBN) on enhanced prudential measures for banks operating under regulatory forbearance.

The bank in a statement signed by Funmi Adedibu, its company secretary reassured its investors, analysts, and stakeholders of its strong commitment to regulatory compliance, prudent capital management, and long-term financial soundness.

Current Loans

The bank gave details of its current loans in the statement.

“FCMB Group’s Nigerian Banking Subsidiary currently has loans under CBN forbearance (credit exposures to 3 entities and 2 obligors) amounting to ₦207.6 billion as at 31st May 2025 (down from N538.8 billion as at September 30th, 2024).

“These are currently classified as Stage 2 loans. The Bank has made provisions for these loans over the last few years, and intensified resolution efforts have led to over 60% reduction in its credit forbearance exposures.

“Once these loans exit the CBN forbearance regime, we anticipate that this would lead to an initial spike in Stage 3 loans to ~11.5% of the total loan book which would decline below 10% by the end of the financial year, based on anticipated loan book growth.

“The Bank has one additional obligor (classified as a Stage 1 loan since drawdown to date) on the CBN forbearance for Single Obligor Limit (SOL). This Obligor will be brought within SOL limit by September 30th, 2025, following the conversion to equity of a recently concluded N23.1 billion Convertible Loan and audited 9 months projected retained earnings.”

CBN Approval For Convertible Loan

The bank also stated the group has already received CBN approval for the capital verification of its Convertible Loan and currently processing the other regulatory approvals required.

Capital Proceeds Downstreaming

The bank has also announced plans to downstream its capital Proceeds in the light of recent occurrences.

“We intend to conclude this process, including downstreaming the capital proceeds to the Bank by the end of July 2025. This would effectively take the Share Capital and Share Premium of the Bank to ~₦267 billion.

“Capital Adequacy will remain above the regulatory minimum of 15% for international banks post forbearance, reinforced with the addition of the converted equity by July 2025 and the planned audit of 9 months retained earnings.” The statement reads

Dividends policy to be Maintained

The bank is set to maintain its dividend payment policy for the financial year 2025 and subsequent years due to the profitability of its banking division which would come as a relief to shareholders.

The CBN had earlier asked the bank to stop dividend payment following its regulatory forbearance issues.

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