Lagos, Nigeria – FCMB Group Plc has successfully raised N500 billion ($332 million USD), allowing its banking subsidiary to meet the international banking license capital requirement. The recapitalization places FCMB among banks that have satisfied the Central Bank of Nigeria’s new capital thresholds.
Okay News reports that the banking sector is undergoing its most significant capital restructuring. Large capital raises typically raise concerns about share dilution. In FCMB’s case, shares outstanding rose from 39.6 billion in 2024 to about 42.8 billion in 2025.
However, strong earnings growth masked the dilution effect. For 2025, FCMB reported profit before tax of N200.9 billion, an 80% increase from N111.9 billion in 2024. Profit after tax surged 141% to N176.9 billion, driven by expansion in interest income which crossed N1 trillion.
Despite the larger share base, earnings per share rebounded to N3.96 in 2025, up from N2.46 in 2024. This indicates that profit growth outpaced dilution. Between 2021 and 2025, FCMB’s earnings per share grew from N1.05 to N3.96, implying an annualized growth rate of about 39%.
Yet the stock continues to trade at modest valuation multiples. At current levels, FCMB trades at roughly 3.28 times earnings, 0.73 times book value, and about 0.53 times sales.
Using projected profits of N62.6 billion for the first quarter and N67.9 billion for the second quarter, FCMB could generate roughly N260 billion in profit for 2026. That would imply earnings per share of about N6.1.
At the current market price of about N13, the stock trades at roughly 2 times forward earnings. This is a steep discount to most Nigerian banking peers, many of which trade between 3 and 6 times earnings.
The bank’s exit from regulatory forbearance has led to a sharp increase in credit provisioning. Net impairment losses on financial instruments rose to N86.0 billion in 2025, up from N41.2 billion in 2024. Loan impairment charges climbed to N92.5 billion from N43.8 billion.
However, FCMB’s expanding net interest margins, stronger capital base, and growing deposit base suggest the bank is better positioned to absorb these risks. If earnings momentum holds, a move toward N16 per share over the next six months would still leave the stock trading at relatively modest multiples.
, allowing its banking subsidiary to meet the international banking license capital requirement. The recapitalization places FCMB among banks that have satisfied the Central Bank of Nigeria's new capital thresholds.){kind=link}