Nigerian lender First City Monument Bank (FCMB) is strategizing to raise an additional 150 billion naira ($106.6 million) through the issuance of new securities. Currently holding $89 million, FCMB aims to meet the $355.6 million mark for its operations, including international endeavors. This move suggests a potential downgrade of its license from international to national, as indicated by a financial analyst familiar with the bank's recapitalization process. Meeting the $142.2 million threshold would secure a national license, requiring a significantly lower sum of $53 million. However, to maintain or achieve an international license, FCMB may explore merger opportunities or other avenues to reach the requisite $355.6 million capital, amidst the Central Bank of Nigeria's recent ten-fold increase in minimum capital requirements for banks.
Amidst this recalibration, the Central Bank of Nigeria announced a substantial increase in minimum capital requirements, prompting banks to consider various strategies. These strategies include raising funds, restructuring, or divesting, with options to downgrade licenses, pursue mergers and acquisitions, or establish offshore holding companies while maintaining local operations. FCMB, categorized as a tier-two bank, is gearing up for its annual general meeting on May 24, 2024, as it navigates these transformative changes in the Nigerian banking landscape.