GCR Ratings has upgraded FCMB Group Plc’s national scale long‑term issuer rating to A‑(NG) from BBB+(NG), while affirming the national scale short‑term issuer rating at A2(NG).
Concurrently, GCR upgraded the national scale issue ratings on the Series 1 N20.7bn and Series 2 N26bn Additional Tier 1 Subordinated Bonds to BBB(NG) from BBB‑(NG), maintaining a stable outlook across the board.
“The positive rating action on FCMB Group Plc is hinged on the improved fundamentals of the group’s core operating entity, First City Monument Bank Limited,” GCR stated in a rating announcement on Monday.
“The ratings upgrade reflects the improvement in FCMB’s capital adequacy, supported by the additional capital injection and good internal earnings generation,” the rating agency added, noting that the score also “balances the strong competitive position, adequate funding and liquidity position against the bank’s evolving risk profile”.
FCMB Group operates as a financial services holding company in Nigeria with core operations in banking and a growing footprint across non‑bank financial services, including consumer finance, investment management, and investment banking.
The group encompassed seven direct subsidiaries and three indirect subsidiaries as of 31 December 2025, with a long‑term strategy to expand its footprint across other African markets.
Addressing the structural hierarchy of the institution, GCR noted, “FCMB Group’s rating is one‑notch lower than the consolidated group, due to the subsisting structural subordination.
“This reflects the Non‑Operating Holding Company’s reliance on cash flows and dividends from the bank and other subsidiaries, which could be diverted by regulatory intervention at a time of stress,” the agency explained.
The Series 1 and Series 2 perpetual, non‑cumulative, fixed‑rate, resettable Additional Tier 1 Subordinated Bonds represent the initial tranches issued under the group’s N300bn Debt Issuance Programme. Originally raised in 2023 at a resettable fixed coupon rate of 16 per cent with no scheduled maturity date, these instruments qualify as AT1 capital under Central Bank of Nigeria approvals.
GCR noted that it applied a three‑notch differential from the bank’s senior unsecured ratings due to back‑to‑back loan agreements, contractual note subordination, deferrable interest payments, and write‑down triggers tied to a core equity tier 1 ratio dropping to 10.75 per cent or a point of non‑viability determination by the regulator.
Following recent capital infusions, the bank’s CET1 ratio strengthened from 14.3 per cent as of 31 December 2025 to 22.3 per cent by 31 March 2026. Periodic reports submitted by bond trustees indicate that coupons on both series have been serviced timely without financial covenant breaches.
Outlook metrics for the institution remain positive over the medium term. “The stable outlook reflects our expectations that the GCR core capital ratio will range between 19 per cent and 22 per cent over the next 12–18 months, on account of the bank’s conservative loan book growth,” GCR stated.
“The sustained loan book clean‑up and recovery efforts could support the asset quality metrics, although it remains vulnerable to challenges in the macroeconomic environment,” the agency added. “The funding and liquidity position is expected to remain stable, predicated on the good deposit mobilisation capacity and other funding options”.