FCMB Group Plc has officially launched a significant public offering aimed at raising N110.94 billion. The offer, which began on July 29 and will close on September 4, 2024, involves the issuance of 15,197,282,219 ordinary shares priced at N7.30 each.
This public offering represents a discount of approximately 7.6% compared to the closing share price of N7.90 on June 6, 2024, and a 4.2% discount relative to the 30-day volume-weighted average price of N7.62 on the same date. The strategic move is part of FCMB’s broader expansion plans and capital-raising efforts to enhance its growth trajectory.
FCMB Group has demonstrated impressive performance over the past five years, with a remarkable 305% growth in share price and a 100% increase in dividends per share. Analysts view the current stock as undervalued, trading below book value and boasting a low price-to-earnings ratio, indicating potential for substantial upside.
The ongoing capital raise aligns with new regulatory requirements from the Central Bank of Nigeria (CBN), which mandates Nigerian banks to recapitalize according to updated guidelines. The CBN’s recent directives require banks to raise between N50 billion and N500 billion based on their licenses, with a total of approximately N4.14 trillion expected to be raised by March 2026.
In response to these guidelines, FCMB Group has proactively set its sights on meeting its capital goals ahead of its peers. The group’s recent financial performance underscores its robust position: it reported a profit before tax (PBT) of N64.2 billion for the first half of 2024, a 68% year-on-year increase, and a net profit of N59.5 billion, also up by 68% from the previous year.
Key financial metrics for FCMB Group include a gross earning of N374.5 billion in H1 2024, a 57% improvement from the previous year, and a notable 81% increase in interest income. The group has also seen significant growth in customer deposits and net loans, highlighting its strong operational performance.
FCMB’s public offering proceeds will be allocated towards several strategic initiatives: N84.57 billion for business expansion, N16.22 billion for IT and cybersecurity infrastructure, and N7.32 billion for human capital investment. Group Chief Executive, Ladi Balogun, emphasized the group’s commitment to leveraging these funds for robust growth, enhancing stakeholder value, and capitalizing on its digital-led business model.
Balogun highlighted the group’s leadership position in key segments, including Consumer Finance and Investment Banking, and its focus on innovation and digital transformation. The public offering is expected to accelerate FCMB’s expansion plans and position the group for continued success in the evolving financial landscape.
As the public offering progresses, FCMB Group’s proactive capital raise and strategic growth plans reflect its commitment to maintaining a leading position in the Nigerian financial sector and delivering value to its investors.
