FCMB raises N5.1 billion from bond offering to boost capital buffers

03 Feb 2017
Financial Nigeria


The seven-year bond was issued by way of book-building and has a coupon rate of 17.25 per cent.

Ladi Balogun, Group Managing Director/CEO, First City Monument Bank

First City Monument Bank has raised N5.1 billion from a bond offering in order to strengthen its capital buffers, according to Reuters on Friday. The seven-year bond was issued by way of book-building with a coupon rate of 17.25 per cent.

The bond offering was fully subscribed, although it was less than the N7.5 billion that the bank originally planned to raise. Standard Chartered Bank, Chapel Hill Denham, and FCMB Capital Markets acted as book runners on the bond issue.

According to Reuters, several Nigerian banks are likely to raise capital this year or sell some assets to boost capital ratios as non-performing loans pile up owing to the country’s economic downturn. In October last year, Access Bank raised $300 million via a Eurobond from the international bond market.

Last November, Ladi Balogun, FCMB’s CEO, said the bank planned to maintain high provision coverage ratios and strengthen capital adequacy and liquidity ratios in an effort to pull through Nigeria’s tough macroeconomic climate.

In the third quarter of 2016, FCMB said pre-tax profit rose 453 per cent to N14.2 billion while revenue rose by 29 per cent to N140.7 billion. However, the bank’s net impairment charges on loans rose 206 per cent to N31.3 billion primarily due to oil and gas exposures and delayed salary payments.

FCMB’s stock closed at N1.3 per share on Friday, down 0.76 per cent from the previous day’s close.

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