FCMB Group Reaffirms Stability Amid CBN’s New Directive on Forbearance Loans

FCMB Group Reaffirms Stability Amid CBN’s New Directive on Forbearance Loans

FCMB Group Plc has responded to the Central Bank of Nigeria’s (CBN) recent directive on enhanced prudential measures for banks operating under regulatory forbearance, reaffirming its commitment to regulatory compliance and financial resilience.

According to the statement signed by Funmi Adedibu, the company secretary, FCMB Group’s Nigerian Banking Subsidiary currently has loans under CBN forbearance (credit exposures to 3 entities and two obligors) amounting to N207.6bn as at 31st May 2025 (down from N53 8.8bn stakeholders of its unwavering dedication to sound capital management and long-term financial stability. FCMB emphasised that it remains well-positioned to meet regulatory expectations while sustaining value for shareholders (as at September 3oth, 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 6o% reduction in its credit forbearance exposures. Once these loans exit the CBN’s forbearance regime, we anticipate an initial spike in Stage 3 loans to -11.5% of the total loan book, which will 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 N23.1bn Convertible Loan and audited 9 months projected retained earnings. The Group has already received CBN approval for the capital verification of the Convertible Loan, and we are currently processing the other required regulatory approvals. 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 -N267bn. Capital Adequacy will remain above the regulatory minimum of 15% for international banks post-forbearance, reinforced by the addition of converted equity in July 2025 and the planned audit of 9 months’ retained earnings.

Our Nigerian Banking Subsidiary contributed 46% of the 2024 dividend paid to shareholders (the balance coming from other non-bank subsidiaries). Barring any unforeseen circumstances, the Group expects to have sufficient buffers to maintain its dividend policy for the financial year 2025 and the immediate subsequent years.

The company appreciates the continued trust and confidence of its customers, investors, and stakeholders and will continue to provide regular and timely updates as required.