Global Credit Ratings (GCR) has upgraded FCMB Group Plc’s national scale long-term issuer rating to A-(NG) from BBB+(NG), citing a stronger capital position, improved earnings generation and a resilient funding profile, in a move that underscores the group’s improving credit fundamentals.
The rating agency affirmed the group’s short-term issuer rating at A2(NG) and maintained a Stable Outlook. GCR also upgraded the ratings on FCMB Group’s Series 1 N20.7 billion and Series 2 N26 billion Additional Tier 1 (AT1) subordinated bonds to BBB(NG) from BBB-(NG), while retaining a Stable Outlook on both instruments.
According to the rating agency, the upgrade reflects the improved financial strength of First City Monument Bank Limited, the group’s core banking subsidiary, following a successful capital injection and sustained internal earnings generation.
“The ratings upgrade reflects the improvement in FCMB’s capital adequacy, supported by the additional capital injection and good internal earnings generation. The rating also balances the strong competitive position, adequate funding and liquidity position against the bank’s evolving risk profile,” GCR stated.
The agency, however, noted that FCMB Group’s issuer rating remains one notch below that of its banking subsidiary due to structural subordination associated with its non-operating holding company structure.
It explained that the holding company depends largely on dividend flows and cash distributions from its subsidiaries, which could be constrained during periods of regulatory intervention or financial stress.
