Nigerian mid-tier lender FCMB plans to raise 10 to 15 billion naira ($47 million) in Tier II debt to boost its capital ratio and will target its retail investors for the offering, its chief executive officer said on Wednesday.
Ladi Balogun said its capital ratio was close to the regulatory limit of 15 percent by half-year, and that it was doing the capital raising to provide some cushion. He said the bank was also slowing down loan growth.
“For the Tier II we would be looking at anywhere in the range of 10 to 15 billion naira. Its really going to be targeted at retail because we feel that the rates from institutions will be high,” Balogun told an analysts conference call.
“We have interest from some depositors who want higher yields.”
The central bank shored up mid-tier lender Skye Bank this month with a loan and replaced its management after its capital fell below levels required by regulators and it has been urging people not to panic about the banking system.
But pressure is building, with loan books – nearly half of them in dollars – hammered by a shrinking economy, a plunging currency and acute foreign exchange shortages in Africa’s biggest oil producing nation following the slump in oil prices.
The central bank has told lenders to set aside extra provisions against their dollar loans in the wake of the sharp fall in the naira since it floated the exchange rate in June.
