FCMB Launches N110bn Public Offer To Strengthen Capital Base

First City Monument Bank (FCMB) Limited Group has initiated a public offer to raise N110 billion, issuing 15,197,282,219 ordinary shares at N7.30 per share.

This capital raise is part of a broader strategy to meet the Central Bank of Nigeria’s (CBN) new capital requirements for banks, which have significantly increased after almost two decades.

The Chief Executive Officer (CEO) of FCMB Group, Mr. Ladi Balogun, detailed the phased approach to the capital raise at the recent ‘Facts Behind the Offer’ presentation at the Nigerian Exchange Limited (NGX).

The current phase, which includes a public offer and a small private placement, aims to be concluded by October, 2024.

The bank plans to raise a total of N150 billion in this initial phase.

FCMB, which holds an international banking license, is required to meet a N500 billion capital requirement and currently seeks to raise an additional N375 billion.

The second phase of the capital raise will involve selling minority stakes in some of its subsidiaries, expected to generate between N80 billion and N100 billion.

The final phase, a private placement, is planned for late next year.

Mr. Balogun emphasised the importance of maintaining earnings per share for investors despite the issuance of new shares.

The funds raised will be directed towards supporting business growth, particularly in key sectors such as agriculture, small, and medium-sized enterprises (SMEs), and non-oil exports.

Additionally, the capital will be used to enhance technological infrastructure, including cybersecurity, and to invest in human capital.

He also noted the need to avoid over-diluting existing shareholders, suggesting that the group might reduce its stake in some subsidiaries to around 70 percent while retaining control.

Mr. Jude Chiemeka, CEO of NGX, expressed confidence in the success of FCMB’s capital raising efforts and highlighted the Exchange’s digital platform, NGX Invest, as a tool for investors to participate in the offer.

He encouraged both stakeholders and potential investors to take advantage of the platform, which aims to simplify the investment process.