By Alex C
First City Monument Bank (FCMB) which acquired bailed-out FinBank Plc three years ago, plans to raise about $300 million of funding this year to boost consumer lending and may consider issuing Eurobonds.
Ladi Balogun, Chief Executive Officer, FCMB said the bank would only issue the debt instrument if market conditions are favorable.
“Our preferred source of funding has been the loan markets as opposed to bond markets due to more stable pricing. We will probably get to about 40 percent of our loan book being personal lending,” Balogun explained.The bank plans to increase its loan book by about 20 percent to N540 billion ($3.3 billion) this year, as it joins other Nigerian lenders in raising debt to boost credit to consumers and fund infrastructure.
“The bank is targeting a return on equity of 15 percent this year and 20 percent in 2016 compared with 13 percent in 2013. FCMB plans to increase its customers to 4 million by 2016 from 2.5 million,” Balogun added.
FCMB’s profit rose 21 percent to 5.05 billion naira in the three months through March from a year earlier, the company said in April.
It will be recalled that FCMB Plc received a second credit of $100-million (N12.8-billion) from global banking group HSBC Holdings plc to help fund a growth plan.HSBC in March provided FCMB with the first $100-million (N12.8-billion) credit and the bank had since attracted a total of $300-million (N34.4-billion) in foreign funds in the last six months, according to a statement.
“This bespoke funding structure is part of FCMB’s deliberate strategy to fund its ambitious growth through a combination of international debt and equity offerings,” the statement said.
This development comes shortly after FCMB Capital Markets (FCMBCM), a subsidiary of FCMB was adjudged the winner of the prestigious Euromoney Award for the Best Investment Bank in Nigeria in 2007, a further proof of the bank’s position as Nigeria’s leading investment bank, and one of the fastest growing universal banks.
The bank is reputed to have attracted over $300 million of foreign funds in the last six months through the likes of HSBC Bank plc; Helios Investment Partners, a UK based equity fund; CDC, an investment arm of the British Government; the United States based Soros Private Equity Funds; and other prominent international investors.