UPDATE 1-Nigeria’s FCMB eyes debt sale to boost capital

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By Chijioke Ohuocha

LAGOS, April 2 (Reuters) – Nigerian banking group FCMB plans to raise tier II debt and retain profits this year to boost its balance sheet after the adoption of stricter accounting standards impacted its capital ratios, it said on Tuesday.

The banking group said the capital adequacy ratio for the mid-tier lender FCMB Bank, stood at 15.9 percent in 2018, down from 16.9 percent a year earlier. It added that it expected its capital to grow throughout 2019.

Nigerian banks have been adopting stricter IFRS 9 accounting standards which require lenders to model credit loss risk based on expected rather than incurred losses and has a material impact on regulatory capital requirements.

On Monday, Africa-focused Ecobank said it had injected $64 million into its Nigerian unit in a bid to raise its capital ratio above the central bank’s regulatory minimum of 16 percent.

FCMB last week said 2018 pretax profit grew 73 percent to 18.44 billion naira but reduced its dividend pay out to conserve capital.

Shares in the Lagos-listed FMCB rose 1.06 percent on Tuesday to 1.90 naira, valuing the banking group at 37.6 billion naira ($123 mln).

FCMB said it was targeting a 5-10 percent loan growth in 2019. ($1 = 305.90 naira) (Reporting by Chijioke Ohuocha; editing by David Evans)


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