FCMB Group Plc has moved to reassure investors following a new Central Bank of Nigeria (CBN) directive that suspends dividend payments and tightens oversight for banks with outstanding forbearance-related loans or breaches of the Single Obligor Limit (SOL).
In a statement released Monday, the bank disclosed that it had cut its forbearance-linked loan exposure by more than 60%, reducing it from N538.8 billion in September 2024 to N207.6 billion as of May 31, 2025.
These loans, tied to three entities and two obligors, remain classified as Stage 2 under IFRS 9, but the bank says it has consistently made provisions for them and expects full resolution soon.
What FCMB is saying
The group said it has been provisioning for these exposures over the past few years, adding that intensified resolution efforts have resulted in a more than 60% reduction in the forbearance loan book.
- “The Bank has made provisions for these loans over the last few years, and intensified resolution efforts have led to over 60% reduction in its credit forbearance exposures.”
FCMB expects these loans to fully exit the forbearance regime in the near term, which will likely lead to a temporary increase in Stage 3 non-performing loans—peaking around 11.5% of the total loan portfolio before declining to below 10% by year-end, aided by anticipated loan growth.
- FCMB also revealed it is resolving a temporary breach of the CBN’s Single Obligor Limit by converting a N23.1 billion loan to equity—a move expected to boost its capital base to about N267 billion and keep it well above regulatory thresholds.
The Group stated that it has “already received CBN approval for the capital verification of the Convertible Loan” adding that it is currently processing the “other regulatory approvals” required.
Dividend outlook remains stable
Despite regulatory headwinds, FCMB said its group-level earnings are sufficiently diversified to withstand temporary restrictions on dividend payments from the banking arm.
In 2024, the bank’s Nigerian banking subsidiary contributed 46% of total dividends paid to shareholders, with the remaining 54% coming from non-bank subsidiaries.
Looking ahead, the group expressed confidence in its ability to maintain dividend payouts, barring unforeseen circumstances, citing robust buffers and capital reinforcement measures currently underway.
- “We expect to have sufficient buffers to maintain our dividend policy for the 2025 financial year and the immediate subsequent years,” the statement read.
The reassurance comes amid heightened scrutiny of Nigerian banks’ capital health following the CBN’s June 13 directive, which affected several tier I and tier II lenders with material forbearance or single obligor breaches.
FCMB’s proactive disclosures and accelerated resolution plan may offer some comfort to investors as markets continue to reprice Nigerian banking stocks in light of the CBN’s forbearance phase-out and new capital rules.
FCMB share price fell 6.57% at the close of trading June 16th 2025.
