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FCMB returns 177% gains to investors in 3 months


April 12, 2007/Vanguard




First City Monument Bank Plc (FCMB) shares remain one of the prides of investors in the last few weeks in a market up beat that has seen the share price of the bank rise by over 177 percent since the beginning of the year, 2007.


Sources close to the bank revealed that FCMB’s share price which closed at N4.15k in December 2006, has appreciated by N7.35k, trading at N11.50 at the close of business last week. This represents about 177 percent return on investment.


Industry operators who predicted further sharp increases in the bank’s share price within the second quarter and the rest of this year attributed the development to the recent strategic initiatives of the bank which has seen it attract foreign direct investments from reputable global financial institutions and portfolio investors in the last few weeks, a trend that has permanently placed the shares of the bank on high demand in the market.


For instance, HSBC Bank Plc early last week successfully executed a ‘landmark’, privately placed, non-secured structured debt instrument totaling US$100 million with the bank.


This is the first agreement of its kind with an African bank in the international capital markets. The facility is part of a deliberate strategy by FCMB to fund ambitious growth plans in Nigeria, through a combination of international debt and equity offerings. In addition, the bank hopes to raise over US$1 billion in medium to long-term funding over the next 18 months.


Also recently, a club of leading international institutional investors led by Helios Investment Partners crossed a block trade in the shares of First City Monument Bank Plc (FCMB) acquiring 1,5 billion shares, representing 15.81 percent of the bank’s shareholdings. FCMB is also expecting to make some further investment announcements before the end of its financial year in April 2007.


This is part of the bank’s regional and international expansion programme, which will signal the commencement of international banking operations. The bank had within the last quarter of 2006 also signed a memorandum of understanding (MOU) with Sabre Capital Worldwide, a leading private equity partnership and management support firm that is focused purely on retail and consumer banking.


Under this strategic partnership, Sabre Capital provides strategic support to FCMB in various areas while assisting the bank to raise capital from the global financial market. Apart from this FCMB is also increasing its domestic and global alliances via various partnerships with regional and global corporations to establish various services including mortgage banking and micro financing.


Management of the bank, driven by the core objective to become a tier-one player in the market by 2010, intends to transform the bank into a fully-fledged retail bank within the next year, an area that has traditionally been under serviced in Nigeria. This, the management says will be achieved through aggressive branch expansion, as well as expanding the bank’s footprint through strategic alliances.

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