Month: November 2025

FCMB Group Plc has issued a formal clarification regarding its recent decision to increase its authorised capital-raise ceiling from N340 billion to N400 billion. According to the institution, the adjustment is not the launch of a fresh capital-raising programme but a regulatory alignment step compelled by a new directive from the Central Bank of Nigeria (CBN). The clarification follows market speculation triggered by an addendum the Group published on November 21, 2025, amending aspects of the Extraordinary General Meeting (EGM) notice earlier released on November 15.

In the updated communication, the Company Secretary, Mrs. Olufunmilayo Adedibu, clarified that the amended resolution replaces the previously published Resolution 1. She explained that the Board’s only intention is to ensure that FCMB’s authorised capital-raise limit reflects the latest regulatory expectations communicated by the apex bank. This means the Group is not seeking additional capital beyond what has already been raised but is ensuring regulatory headroom to properly accommodate funds from its completed 2025 public offer.

Revised Resolution and Regulatory Triggers

The revised authorisation empowers the Board to raise up to N400 billion—or its equivalent in foreign currencies—through any combination of shares, bonds, notes or other capital instruments, executed locally or internationally. This flexibility is subject to relevant regulatory approvals and, according to FCMB, does not represent an expansion of fundraising ambitions but a compliance move.

This adjustment is directly tied to the CBN’s circular issued on November 14, 2025. The circular clarified that for Financial Holding Companies (HoldCos), minimum paid-up capital must now be calculated exclusively as issued share capital plus share premium. Reserves and retained earnings—previously included by some institutions—no longer count toward minimum capital.

The new rule immediately affected several banks and HoldCos, prompting industry-wide reviews of capital positions and contributing to delays in half-year and nine-month earnings reports. Some institutions that had previously believed themselves adequately capitalised suddenly faced compliance gaps, especially regarding dividend payments.

How the New Rule Affects FCMB

FCMB explained that the revised CBN definition impacted its internal capital structure because its ongoing plan to divest minority stakes in two subsidiaries would have reduced its paid-up share capital to a level lower than the combined capital thresholds of those subsidiaries. Falling below this benchmark would trigger the dividend restrictions outlined in Section 7.1 of the CBN’s Guidelines for Financial Holding Companies.

To avoid that scenario, the Group increased the capital-raise ceiling to N400 billion, allowing the Board to absorb the additional capital already generated from the 2025 public offer. The offer has closed and is now awaiting CBN verification, SEC approval and NGX listing. FCMB stressed that this change does not constitute new fundraising but ensures it remains fully compliant and able to maintain dividend payments.

Recapitalisation Strategy Remains Unchanged

FCMB reaffirmed that its three-phase recapitalisation plan is still intact. This plan consists of:

1. The 2024 public offer and convertible instrument issuance

2. The restructuring and partial divestment of minority stakes in two subsidiaries

3. The 2025 public offer, which has now closed

Collectively, these steps are designed to ensure that FCMB’s banking subsidiary meets the CBN’s N500 billion minimum capital requirement for international banks under the ongoing sector recapitalisation programme.

The only modification relates to the scale of the minority-stake divestments, which may now be reduced so the Group does not fall below the revised paid-up capital threshold.

Shareholder Value Will Not Be Diluted, FCMB Assures

Addressing investor concerns, FCMB emphasised that the expanded capital-raise ceiling does not amount to dilution of shareholder value. The Group referenced its performance projections, noting that earnings per share (EPS) are expected to grow sharply—from N1.85 in 2024 to N4.60 by 2026—representing a 58% compound annual growth rate. According to the Group, this demonstrates that even with a larger capital base, the business remains highly profitable and value-accretive.

Broader Sector Implications

Industry analysts expect FCMB’s move to be one of several similar adjustments across Nigeria’s financial sector as institutions realign their capital structures under the CBN’s stricter capital definition. With regulatory scrutiny increasing ahead of the 2025 recapitalisation deadlines, more HoldCos are likely to update their reporting frameworks to avoid dividend restrictions, sanction risks and compliance gaps.

As banks prepare their full-year financials under the new rules, the sector is expected to experience continued disclosures, adjustments and governance reforms in the weeks ahead.

The Central Bank of Nigeria (CBN) has unveiled a stringent new proposal aimed at curbing the persistent issuance of dud cheques across the financial system. Under the new rules, individuals who repeatedly issue cheques that bounce due to insufficient funds may face an automatic five-year ban — a sanction that will also apply again for every subsequent offence.

The proposal is contained in an exposure draft titled Guidelines on the Treatment of Dud Cheques by Banks and Other Financial Institutions in Nigeria, released on Monday for comments from stakeholders and industry operators. The CBN noted that despite long-standing legislation discouraging the practice, dud cheques remain a recurring problem, eroding public trust in cheque-based transactions and affecting the integrity of the financial system.

The revised guideline, issued pursuant to the CBN Act 2007 and the Banks and Other Financial Institutions Act (BOFIA) 2020, is designed to tighten reporting requirements, strengthen compliance, and protect the payments ecosystem. Once adopted, it will replace all previous circulars and directives on the subject.

Under the framework, banks and other financial institutions must adopt stricter monitoring and reporting procedures. Whenever a bank confirms that a cheque has been dishonoured due to insufficient funds, it must report the incident to the Credit Risk Management System (CRMS) as well as at least two licensed private credit bureaus — and this must be done within one hour of confirmation. This is a significant acceleration from previous reporting timelines.

Banks are also required to inform the customer responsible for the dud cheque within two working days, using a communication channel that is fully traceable. Each financial institution must also keep copies of all dishonoured cheques for a minimum period of five years, ensuring availability for audits and regulatory inquiries. Before issuing cheque books, banks must clearly educate customers on the consequences of issuing cheques without adequate funds.

A major highlight of the draft is the automatic blacklisting of any customer who issues three dud cheques within the banking system. Once a customer crosses this threshold, the CRMS will immediately alert all banks, categorizing the individual as a “serial dud cheque issuer.” The reporting bank must then notify the customer in writing and update the individual’s status at private credit bureaus.

The consequences are severe: serial offenders will be barred from accessing the cheque clearing system, prohibited from opening current accounts, and blocked from obtaining loans or credit facilities from any bank or financial institution for a period of five years. This effectively constrains the customer’s participation in the formal financial sector.

Even more stringent is the provision for repeat offenders. If a previously barred customer completes the five-year restriction period but later issues another dud cheque at any time, the individual will automatically incur another five-year ban. The renewed ban applies each time the offence is repeated, with no maximum limit. This means a chronic offender could be shut out of the financial system for a decade or even longer.

The guideline also prescribes penalties for non-compliant institutions. Banks that fail to report dud cheques within the stipulated timeframe, neglect to notify customers, open accounts without carrying out mandatory status checks, or fail to withdraw unused cheque leaves face fines ranging from ₦1 million to ₦5 million per incident, depending on their category. Private credit bureaus are not exempt; they may face penalties of up to ₦2 million for failing to maintain accurate records of reported offenders.

The CBN emphasized that the proposed framework is part of broader efforts to discourage financial misconduct, safeguard the credibility of the payments system, and enhance corporate responsibility across the industry. Stakeholders have three weeks to submit comments, suggestions, or objections to the Director of the Financial Policy and Regulation Department via the CBN’s designated channels.

The proposal signals the CBN’s intent to eliminate habitual issuance of dud cheques and reinforce financial discipline, ensuring that cheque transactions remain reliable and credible within Nigeria’s evolving financial landscape.