FCMB Assures Dividend Stability Amid CBN Directive

FCMB Group Plc has reaffirmed its commitment to maintaining dividend payouts to shareholders in 2025 and beyond, despite recent regulatory changes from the Central Bank of Nigeria (CBN) targeting banks with outstanding credit exposures under forbearance.

In a statement issued by Company Secretary, Funmi Adedibu, the group explained that its diverse revenue base—drawn significantly from non-banking subsidiaries—positions it to continue rewarding shareholders. The assurance follows a new directive from the CBN instructing banks with credit exposures under regulatory forbearance to suspend dividend payments, defer executive bonuses, and halt offshore investments.

According to the CBN, the directive is part of a broader initiative to enhance the strength and resilience of the banking sector, especially in relation to capital adequacy and loan provisioning.

FCMB revealed that only 46% of its 2024 dividend was contributed by its Nigerian banking arm, with the remainder generated by other non-banking subsidiaries. This diversification, the group noted, would provide sufficient buffers to sustain its dividend policy unless unforeseen circumstances arise.

Detailing its forbearance exposure, FCMB stated that its Nigerian banking arm currently holds loans under CBN forbearance valued at ₦207.6 billion as of May 31, 2025, down from ₦538.8 billion as of September 2024. These are categorized as Stage 2 loans, and the bank noted significant provisioning efforts over the years, alongside an over 60% reduction in forbearance exposure.

The group also clarified that once the forbearance regime ends, some of these loans may temporarily shift to Stage 3, raising the ratio of non-performing loans to approximately 11.5% of the total loan book—expected to normalize below 10% by year-end as the loan book grows.

Additionally, FCMB disclosed that it is managing one other obligor under forbearance for exceeding the Single Obligor Limit (SOL). However, it plans to resolve this by September 30, 2025, via a ₦23.1 billion convertible loan recently finalized. The loan will be converted to equity, boosting capital compliance.

The bank also noted that it has obtained CBN approval for capital verification related to this transaction and is in the process of completing other required approvals. The full capital downstream is expected to conclude by the end of July 2025, which would enhance its capital base to approximately ₦267 billion. The bank said this would maintain its capital adequacy ratio above the regulatory minimum of 15% for international banks.

Meanwhile, analysts at Renaissance Capital Africa estimate FCMB’s regulatory forbearance exposure to be around 8% of its total loan portfolio, or about $134 million—reportedly the lowest among six profiled banks.