GCR Upgrades FCMB Ratings to A/AI, Outlook Stable
GCR Ratings (GCR) has upgraded First City Monument Bank Limited’s (FCMB) national-scale long- and short-term issuer ratings to A(NG) and A1(NG) from A-(NG) and A2(NG), respectively, with the outlook maintained as Stable.
According to the rating note, FCMB is considered the core operating entity within FCMB Group Plc as such, the national scale issuer ratings on the bank reflect the strengths and weaknesses of the group.
GCR said the ratings upgrade reflects an improvement in FCMB’s capital adequacy, supported by an additional capital injection and strong internal earnings generation.
The bank’s rating also balances the strong competitive position and adequate funding and liquidity against the bank’s evolving risk profile, GCR added.
The rating note said the group’s competitive position is positive to the ratings, supported by its established track record and diversified business operations.
Specifically, FCMB is one of the top tier-two banks in Nigeria, accounting for a market share of approximately 4.0% of the Nigerian banking industry’s total assets as of 31 December 2025.
The bank international presence, anchored by the UK operations, continues to support growth through its facilities to Nigerian corporates and trade finance-related transactions.
Ratings analysts said FCMB also actively leverages technology to drive operational efficiency in line with its digital transformation and borderless banking strategy.
Furthermore, the group’s growing footprint in the non-bank financial services segment enhances earnings diversification and competitiveness in Nigeria’s increasingly dynamic banking landscape.
GCR said looking ahead, the group’s geographical expansion plans could further bolster its competitive positioning and support earnings growth.
The group’s strengthened capitalisation is a major ratings positive, largely supported by the various capital raising initiatives to meet the regulatory capital requirements for international banks.
FCMB’s shareholders’ funds increased to NGN1.1 trillion as of 31 March 2026 from NGN836.4 billion in December 2025, and NGN688.9 billion in 2024, resulting in a stronger GCR core capital ratio of 25.2%, up from 15.4% in 2025.
Over the next 12-18 months, ratings analysts expect the GCR core capital ratio to range between 19% – 22%, based on the good earnings retention and conservative growth in the loan book.
The group’s risk position improved over the last 12 months, underpinned by the loan book clean-up and other remedial actions, including the sale of some impaired loans.
As a result, the NPL ratio (IFRS 9 stage 3 loans to gross loans) moderated to 5.1% as of 31 December 2025 and 6.0% in 2024, while the credit loss ratio increased to 3.3% from 1.9% in 2024 due to additional provisions stemming from the exit of regulatory forbearance.
GCR said FCMB’s counterparty concentration risk also moderated, with the top twenty obligors accounting for a lower 37.4% of the loan book, down from 48.1% in 2024.
The bank’s foreign currency (FCY) exposures remained relatively high at 61.9% of gross loans as of 31 December 2025 from 61.4% in 2024, with inherent risk mitigated through natural hedge.
GCR said looking ahead, the bank’s improved underwriting practices, recoveries and conservative lending approach could support the asset quality metrics.
However, it remains vulnerable to the challenges in the macroeconomic environment. We will also monitor the impact of the bank’s ongoing discussions with the CBN on the classification of two names and related asset quality metrics over the outlook horizon.
Ratings analysts also considered the bank’s funding and liquidity assessment positive for the rating, underscoring its stable funding structure and a sufficiently liquid balance sheet.
The group is largely funded by customer deposits, which constituted 87.1% of the total funding base as of 31 December 2025, a slight increase from 87.0% in 12 months.
Customer deposits increased marginally by 5.8% to NGN5.4 trillion as of 31 December 2025 from NGN5.1 trillion in 2024, driven by deliberate efforts to reduce reliance on expensive deposits to support lower funding costs.
Consequently, the proportion of current and savings account (CASA) deposits to the total customer deposits increased to 65.4% as of December 2025 from 61.0% in December 2024, while cost of funds reduced to 8.2% in 2025 from 8.3% in 2024 and further to 7.4% as of 31 March 2026.
Additionally, the deposit base is considered diversified, with the top twenty depositors accounting for 14.3% of the customer deposits as of 31 December 2025 as against 20.3% in 2024.
GCR said the bank’s balance sheet is sufficiently liquid, with the GCR liquid assets to customer deposits and wholesale funding registered at 69.5% and 4.7x respectively as of 31 December 2025 compared with 44.9% and 3x respectively in 2024.
Over the outlook period, ratings analysts expect the bank’s funding and liquidity profile to remain strong. The stable outlook reflects expectations that the GCR core capital ratio will range between 19% and 22% over the next 12-18 months, on account of the bank’s conservative loan book growth.
GCR said 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 funding and liquidity position is expected to remain stable, predicated on the good deposit mobilisation capacity and other funding options, the rating agency stated.
