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FCMB’s $300m facility targets expansion, economic support

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IMAGE: Ladi Balogun Group Managing Director/ Chief Executive Officer, FCMB Group »


First City Monument Bank (FCMB) has continued to witness improved earnings growth, a strong balance sheet and credit standing.

The bank’s profit before tax rose 5 percent to N11.1 billion in first half of 2014, from N10.6 billion for the same period in 2013. Also, the bank’s net interest income increased to N32.4 billion in first half of 2014, from N26.9 billion in 2013, an increase of 20 percent year-on-year (YoY).

FCMB is a member of FCMB Group plc, which is one of the leading financial services institutions in Nigeria with subsidiaries that are market leaders in their respective segments. Having successfully transformed to a retail and commercial banking-led group, the bank has continued to distinguish itself by delivering exceptional services, while enhancing the growth and achievement of personal and business aspirations of its customers.

Last week, the bank successfully secured about $300 million medium- and long-term funding from Development Finance Institutions (DFIs) and international commercial banks in four different transactions. This follows an upgrade in the rating of the bank by Global Credit Rating (GCR) to A- (that is, stable outlook).

The $300 million secured by FCMB from the DFIs and others demonstrates the confidence the lenders and the international financial market have in the management capabilities of the bank. Proceeds of the facility will be used for general lending purpose to key sectors of the Nigerian economy, branch development as well as channel enhancement.

The International Finance Corporation (IFC), a member of the World Bank Group and the largest global development institution; Citibank and Overseas Private Investment Corporation (OPIC), a multilateral finance institution owned by the US government, provided the loan. Other DFIs include Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V. (FMO) – the Dutch Development Bank; Société De Promotion Et De Participation Pour La Coopération Economique S.A (PROPARCO), a subsidiary of the Agence Française de Développement (AFD), and the European Investment Bank (EIB), a multilateral finance institution owned by the European Union.

Going by the details of the loan, FCMB secured $100 million senior debt financing from the IFC for a tenor of five years, another $100 million from OPIC and Citibank for between two and five years tenor; $60 million from FMO and PROPARCO for tenor between three and five years, and $32.7 million from the EIB for tenor of eight years.

Information from the bank indicates that the facility from Citibank/OPIC, IFC, FMO/PROPARCO will provide lending to telecommunications, power and infrastructure projects. In addition, FCMB will utilise a portion of the loan from Citibank/OPIC to finance small and medium scale enterprises (SMEs) and other activities that will enhance financial inclusion in Nigeria. The $32.7 million provided by EIB will be dedicated to channel expansion purposes.

“The successful fund raising exercise and the number of international institutions that participated in the provision of the facilities is a demonstration of the level of confidence which investors and the international financial market have in FCMB and the Nigerian financial market as a whole,” Ladi Balogun, group managing director/chief executive of the bank, said.

Article Credit: Businessdayonline

Updated 3 Years ago

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Tags:     First City Monument Bank     Ladi Balogun     Development Finance Institutions     Global Credit Rating     International Finance Corporation