By Emele Onu, 07.22.2010
The International Finance Corporation (IFC) is to invest $170 million in First City Monument Bank (FCMB), a move the bank said is strategic for its next expansion programme.Managing Director and Chief Executive of the bank, Mr Ladi Balogun, said of the total fund, the sum of $60 million will be invested as equity while $110 million will be long-term debt of 7 year tenor, at an interest rate of about 4.5 per cent per annum.
Balogun, who addressed shareholders at the bank’s Annual General Meeting (AGM) in Lagos yesterday, said IFC will be investing the fund in two tranches. He said that the investment is expected to benefit the bank in diverse areas, including improving its profile locally and offshore.The shareholders passed a special resolution for the Board to proceed and consummate the deal with the IFC by empowering the Board to take any such steps that might result in increased issued share capital of not more than 575 million ordinary shares on such terms and conditions as may be approved by the directors.
The bank’s chairman, Jonathan Long, explained that the target funding will be of great support to the bank’s business as well as improve its governance structure.Long said even though FCMB is pursuing an expansion programme, which will be given a great lift by the fresh injection, the bank is yet to consider merger or acquisition with any other bank. He however, pointed out that mergers and acquisitions remain an opportunity in the local banking industry and that FCMB may consider its merit and viability in the future.
For the eight months – from May to December 2009, the bank achieved gross earnings of N35.7 billion, representing 50.7 per cent fall as compared to the annualised figure of April 30, 2009.
Pre- tax profit over the eight months period was N564 million, a 85.9 per cent decline when compared to the full year ended April 30, 2009.The shareholders also passed a resolution changing the bank’s year end from April 30 to December 31, in line with CBN’s directives. Also, the Board got shareholders’ approval to change priceWaterhouse Coppers as its auditors, having served the bank for 19 years. KPMG Professional services emerged the new external auditors for FCMB.
The President of the Independent Shareholders Association of Nigeria (ISAN), Sir Sonny Nwosu, commended the management of the bank, on behalf of other shareholders, for running the bank profitably in the past year, notwithstanding the harsh operating environment.