FCMB Group Public Offering: There is a Share for You

FCMB Group Plc is currently in the market for a public offering to raise N110 billion. The financial holding company is issuing 15,197,282,219 ordinary shares of 50 kobo each at N7.30 per share. The offer, which opened on Monday, July 29, will close on Wednesday, September 4, 2024.

Over the past 45 years, FCMB Group has developed into a diversified financial services group with operations in banking, consumer finance, investment management and investment banking.

The group maintained its impressive financial performance, achieving strong year-on-year (YoY) profitability growth. Its earnings remain well-diversified, with the Nigerian bank contributing 68% of pre-tax profit and 32% from other subsidiaries.

The offer is aimed at strengthening the share capital of FCMB Limited and ensuring that the total share capital of the bank is in line with the new minimum capital requirement of the Central Bank of Nigeria (CBN) contained in the CBN Circular dated March 2024.

The lead issuer of the offer is Chapel Hill Denham Advisory Limited and the joint issuers are FCMB Capital Markets Limited, Coronation Merchant Bank, Capital Bancorp Plc, FBNQuest Merchant Bank, FSDH Capital Limited, Futureview Financial Services Limited, Meristem Capital Limited, Stanbic IBTC Capital Limited and United Capital Plc.

The flagship subsidiary of FCMB Limited Group will invest the fund to accelerate its expansion plans that will further enhance value creation for its stakeholders. The proceeds from the offering will be used as follows: Business growth and expansion; Investment in IT infrastructure and cybersecurity; Investment in human capital.

FCMB Group has seven (7) primary and two (2) tertiary subsidiaries. The subsidiaries within the banking group are First City Monument Bank Limited, FCMB Bank (UK) Limited and FCMB Microfinance Bank Limited.

Another subsidiary, Credit Direct Limited, is part of the FCMB Group’s consumer business, while FCMB Pensions Limited, FCMB Trustees Limited and FCMB Asset Management Limited are subsidiaries of the Group within its investment management business. The Group also has subsidiaries CSL Stockbrokers and FCMB Capital Markets Limited overseeing its investment banking business,

During the factual presentation of the offer held on the Nigerian Exchange Limited (NGX), Ladi Balogun, Group Chief Executive Officer, FCMB Group Plc, who gave compelling evidence of the resilience, operational strength and financial performance of the group, noted that despite the ongoing economic uncertainty and market volatility, FCMB Group has maintained solid growth and demonstrated exceptional resilience.

During the Facts Behind the Offer presentation, the Group CEO informed the capital market community that FCMB Group earnings are expected to grow at a compound annual growth rate (CAGR) of over 50 percent over the next three years, leading to a significant increase in earnings per share (EPS) and dividend per share (DPS) growth (20 percent of EPS) post recapitalization.

Session participants had the opportunity to engage with FCMB Group’s management team, gaining insight into the Group’s strategic priorities and plans. Discussions included the Group’s focus on digital transformation, sustainable finance and its plans to leverage emerging market opportunities for further growth.

The Group recorded significant improvement in key financial indicators, including revenue growth and profitability, underlining management effectiveness and strategic flexibility.

The good financial results and the resilience of FCMB Group in the face of adversity confirm its position as a leader in the financial sector, prepared to achieve lasting success and growth. These are the advantages that make it a profitable investment.

“Our results this year reflect the resilience of FCMB Group and our ability to adapt to changing market conditions. Today’s presentation to the Nigerian Exchange highlights not only our financial achievements but also our commitment to delivering long-term value to our shareholders and stakeholders,” Balogun said during the Facts Behind the Offer presentation.

The session focused on several key achievements of the Group, including a significant increase in net income and further expansion in digital banking services. The Group’s diversified portfolio and innovative strategies have allowed it to successfully address economic challenges while continuing to invest in growth and sustainability.

FCMB Group reported a profit before tax (PBT) of N64.2 billion in the first half (H1) of 2024, up 68% year-on-year compared to N38.2 billion recorded in the same period of 2023.

The company reported a gross profit of N374.5 billion in H1 2024, an improvement of 57 per cent year-on-year (YoY) compared to the gross profit of N238.2 billion recorded in H1 2023. Interest income of N269.2 billion represents an increase of 81 per cent year-on-year compared to the interest income of N149 billion in H1 2023.

Also in the first half of 2024, customer deposits at FCMB Group increased by 26 per cent to N3.9 trillion, from N3.1 trillion in FY2023. FCMB Group’s net loans and advances to customers increased by 32 per cent in the first half of 2024 to N2.43 trillion, from N1.84 trillion in FY2023.

During the period, the group’s net profit reached N59.5 billion, a 68 per cent year-on-year improvement compared to N35.4 billion recorded in the first half of 2023.

FCMB Group recorded net interest income of N106.2 billion during the period, an improvement of 47 per cent compared to N72.3 billion in the first half of 2023. The period also saw a 33 per cent year-on-year decline in net impairment losses to N31.3 billion, from N47.1 billion in the first half of 2023.