FCMB pushes for strategic future strength against short term returns

In a bold strategic move to consolidate its position among Nigeria’s tier-1 financial institutions, FCMB Group Plc has launched a N160 billion public share offer, positioning itself to meet the Central Bank of Nigeria’s stringent recapitalisation requirements while unlocking significant value for shareholders.

The offer, which opened on October 2, 2025 to the general investing public and is scheduled to close on Thursday, November 6, 2025, represents 16 billion ordinary shares priced at N10.00 per share. This initiative forms the cornerstone of FCMB’s comprehensive strategy to exceed the N500 billion capital threshold mandated by the apex bank for international banking license holders ahead of the March 2026 deadline.

A Track Record of Resilience and Growth

FCMB Group’s recent financial performance underscores the solid foundation upon which this capital raise is built. As of December 31, 2024, the diversified financial services group posted impressive results that demonstrate both resilience and strategic execution in Nigeria’s challenging macroeconomic environment.

Total assets surged by 59.5% year-on-year to N7.05 trillion, while gross earnings climbed 54% to N794.4 billion, compared to N516.4 billion in 2023. The Group’s deposit base expanded by 48% to N4.30 trillion, reflecting sustained customer confidence, while loans and advances grew 28% to N2.36 trillion. Profit before tax reached N111.9 billion in 2024, representing a 7% increase from the previous year.

The momentum has continued into 2025, with first-half results showing profit before tax of N79.3 billion, a 23% year-on-year growth that signals sustained operational efficiency and effective risk management.

Digital Transformation Driving Value Creation

A significant component of FCMB’s growth story lies in its digital transformation agenda. In 2024, digital revenues crossed the N100 billion mark for the first time, while loan disbursements exceeded N357 billion in value across more than 1.6 million transactions. This digital-first approach has not only enhanced operational efficiency but also expanded the Group’s reach across Nigeria’s diverse economic landscape.

The Group’s agency banking network acquired over 799,700 new customers in 2024, while providing more than N23 billion in microloans to 105,006 individuals and MSMEs. The agricultural sector received particular attention, with lending growing 56.8% year-on-year to N192.6 billion, serving over 370,870 smallholder farmers,58% of whom are women engaged in agriculture.

“We continue to see significant traction in our digital business across lending, payments, and wealth management,” the Group noted in its financial disclosure, highlighting how technology has become central to its competitive positioning.

Strategic Capital Structure and Competitive Positioning

FCMB Group operates through a well-diversified structure spanning four core business lines: Banking Group (First City Monument Bank Limited, FCMB UK Limited, and FCMB Microfinance Bank Limited); Consumer Finance (Credit Direct Limited, Nigeria’s largest non-bank consumer lender); Investment Banking (FCMB Capital Markets Limited and CSL Stockbrokers Limited); and Investment Management (FCMB Pensions Limited, FCMB Asset Management Limited, and FCMB Trustees Limited).

This diversified model has proven particularly effective in navigating market volatility. The Capital Markets division led or participated in 45 transactions in 2024, raising over N1.39 trillion for clients, while gross earnings and profit before tax grew 57% and 62% respectively.

The Investment Management businesses collectively grew assets under management by 35% to N1.37 trillion.

Credit Direct Limited, the Group’s consumer finance arm, demonstrated remarkable resilience with revenues from digitally originated loans surging 140% year-on-year from N16 billion to N38.4 billion. The business added over 88,724 new customers while increasing disbursements by 65%, maintaining strong asset quality with non-performing loans declining from 6.7% to 6.2%.

Expert Perspectives: Undervalued with High Growth Potential

Market analysts have taken notice of FCMB’s strategic positioning and value proposition. Mr. David Adonri, Vice Chairman of HighCap Securities Ltd, expressed strong confidence in the Group’s competitive standing among Nigeria’s international banks.

“FCMB stands as a strong contender among international banks, with a consistent track record of solid fundamentals,” Adonri stated. “There is virtually nothing that GTCO or Zenith Bank offers that FCMB cannot match in terms of service delivery, innovation, or financial strength. The bank has demonstrated resilience and growth in recent times, earning the confidence of both retail and institutional investors.”

Adonri particularly emphasized FCMB’s dividend policy, noting that the Group rewards shareholders with both interim and final dividends, demonstrating its commitment to value creation. “With these strong fundamentals and positive investor sentiment, the upcoming public offering is poised for success,” he added.

Mr. Fred Nwaogazi, an activist shareholder, provided even more bullish commentary on FCMB’s prospects. “FCMB is currently one of the most promising banks in the Nigerian financial sector, and recent developments suggest a strong upside potential,” Nwaogazi observed. “The current offer price is even below the market price, which is a significant advantage for investors looking to get in at a discount.”

He also noted that FCMB’s share price has shown strong momentum throughout its recapitalisation journey, climbing from around N6 to nearly N10, reflecting growing investor confidence. He highlighted that unlike some competitors such as GTCO, Stanbic IBTC, or Zenith, FCMB is not part of any larger banking conglomerate, yet offers the same core banking services and competes effectively.

The Dividend Discussion: A Key to Unlocking Value

Both experts converged on a critical point that could catalyze significant share price appreciation: dividend policy. Nwaogazi was particularly emphatic about this potential value driver.

“One major limitation FCMB has faced in the past is its overly conservative dividend policy, which has kept returns relatively low for shareholders,” Nwaogazi explained. “But the moment they begin to improve their payout,say from the usual N0.20 or N0.30 to N0.50 or more per share,the share price could experience a breakout.”

This observation is particularly salient given FCMB’s improving capital position following the current offer. With enhanced capital adequacy and sustained profitability, the Group may find itself in a stronger position to reward shareholders more generously while maintaining regulatory compliance and funding growth initiatives.

Nwaogazi drew a compelling comparison to illustrate the potential upside: “Let’s be honest,if Wema Bank could hit N21 per share at a point, there’s no reason FCMB cannot approach or even exceed that level,if they continue to deliver strong results.”

Attractive Valuation Metrics

Analysts have described FCMB’s stock as offering “a rare blend of deep value and high growth,” citing an estimated 2025 price-to-book ratio below 0.6x, making it one of the most attractively valued banking stocks in Nigeria. This valuation discount, combined with the Group’s growth trajectory and improving fundamentals, presents a compelling investment case.

The current offer price of N10.00 per share has been described by market watchers as below market value, providing an immediate discount to investors who participate in the public offer. This pricing strategy appears designed to ensure full subscription while rewarding early participants as the

Group’s recapitalisation strategy unfolds.

The Road to N500 Billion and Beyond

Upon completion of the current public offer, FCMB Group plans to finalize the sale of minority stakes in two non-bank subsidiaries, with proceeds earmarked for injection into the banking arm. These combined actions are expected to lift FCMB’s total capital above the N500 billion threshold, ensuring full compliance with the CBN’s March 2026 recapitalisation deadline while positioning the bank to retain its international banking license.

The Group has already demonstrated its ability to execute capital raises successfully. In 2024, through a previous public offer, FCMB raised N144.6 billion, increasing issued shares from 19.8 billion to 39.6 billion. This injection raised the banking subsidiary’s Capital Adequacy Ratio to 18%, securing its national license. In 2025, the Group raised approximately N22.5 billion through a convertible loan issuance, further strengthening its capital position.

Strategic Positioning for Future Growth

With over 200 branches and cash centers across Nigeria’s 36 states, and a customer base exceeding 14 million, FCMB has built an extensive distribution infrastructure. The bank’s loan portfolio is well diversified, with no single sector accounting for more than 15% of total exposure. As of fiscal year 2024, 66% of the loan book was denominated in foreign currency and 34% in local currency, providing natural hedging benefits in Nigeria’s volatile currency environment.

The Group has also secured $125 million from development finance institutions and donor agencies to expand funding to women-owned SMEs and the agricultural sector, demonstrating its commitment to financial inclusion and sustainable development while tapping into concessionary funding sources.

Advisory

As FCMB Group pursues its ambitious recapitalisation target, multiple factors are aligning in its favor. Strong financial performance, successful digital transformation, diversified revenue streams, competitive positioning, and attractive valuation metrics combine to create a compelling narrative for investors.

Market experts are unanimous in their view that FCMB represents solid value at current levels. The key variable that could accelerate share price appreciation, and one that investors will be watching closely, is the Group’s future approach to dividend payments.

“At the current offer price, FCMB is a compelling buy,” Nwaogazi concluded. “With strong fundamentals, improving sentiment, and the potential for better shareholder rewards, the stock represents good value. The market is driven by several key factors—liquidity, expectations, earnings, and sentiment, and right now, FCMB seems to be aligning with all of them.”

As the offer period progresses toward its November 6, 2025, closing date, all eyes will be on FCMB Group’s ability to achieve full subscription and execute its strategic vision of becoming an even more formidable player in Nigeria’s competitive banking landscape.