Fitch Ratings affirms FCMB’s IDR at ‘B-‘ with a positive outlook


Fitch Ratings has affirmed First City Monument Bank (FCMB) Long-Term Issuer Default Rating (IDR) at ‘B-with a stable outlook.

This is according to the report released by Fitch Ratings on its website on Thursday.

According to the rating commentary, the National Long-Term Rating was upgraded to ‘BBB+(nga)’ from ‘BBB(nga)’ in line with the bank’s increased creditworthiness compared to other issuers in the country. The report highlighted the key rating drivers showing improved impaired loans in recent years.


The commentary also pointed that FCMB’s National Ratings were driven by the bank’s standalone strength, with a capital adequacy ratio of 15.9%, which is above the minimum regulatory requirement of 15%.

  • The Issuer Default Rating of FCMB is driven by its intrinsic creditworthiness, defined by its ‘b-‘ VR. The VR reflects FCMB’s exposure to Nigeria’s volatile operating environment and high credit concentrations.
  • This, according to the agency’s commentary, is balanced by the bank’s adequate capitalisation and asset quality for the rating, the latter partly reflecting large non-loan assets comprising mainly Nigerian government securities (B/Stable) and cash placements.

The commentary also highlighted notable indications from the loan books of FCMB in the reference period. Notably, FCMB’s impaired loans (stage 3 IFRS 9) ratio has improved in recent years. It fell to 3% at end-1H21 (end-2019: 3.6%), due primarily to improved economic conditions, loan growth and write-offs.

According to the report, the bank is funded mainly by granular retail and SME deposits (70% of total funding at the end of the first half of 2021, 73% in the form of current and saving accounts). Deposit growth has been rapid in recent years, driving a reduction in the Fitch-calculated loans/customers deposits ratio to 70% at the end of H1 2021 (a level still above peers’) from 77% at the end of 2019.

The recent upgrade and affirmation are in line with its improved performances recorded in recent times.

A cursory analysis of its 2020 full-year performance shows a 10% increase in gross earnings despite the effect of the pandemic during the year. The bank was able to navigate its operations through the pandemic, thereby growing its profit after tax by 13.1% to N19.61 billion compared to N17.34 billion reported in the prior year.

Its statement of financial position also indicated improved assets as its total assets grew by a whopping 23.4% to N2.06 trillion as opposed to N1.67 trillion recorded in the year before. In addition, shareholders’ equity grew by 13.2% to N227.12 billion in 2020. Similarly, loans and advances to customers increased by 14.9% to N822.77 billion in the review period.

Meanwhile, Fitch attested that operating conditions in the country were gradually stabilising and forecasted a 1.9% GDP growth in 2021, following the contraction of 1.8% recorded in the previous year.

Our baseline scenario is that business volumes and earnings should continue to rebound in 2021, while the rally in oil prices is also a positive factor. 

Nevertheless, downside risks linger, given inherently volatile market conditions, with banks still exposed to foreign currency (FC) shortages, potential further currency devaluation, rising inflation and regulatory intervention by the Central Bank of Nigeria (CBN)” the report partly reads.

The board of directors of FCMB Group announced the appointment of Yemisi Edun as the Managing Director and CEO of the banking subsidiary in July 2021, which places her amongst notable female bank CEOS in the country.

As of the time of writing this article, FCMB was trading at N2.89 at the Nigerian Exchange Group.

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