GCR Ratings (“GCR”) has assigned FCMB Group Plc national scale long and short-term issuer ratings of BBB+_(NG) and A2_(NG) respectively, with a Stable Outlook.

Rating Rationale

The ratings assigned to FCMB Group Plc (“the Company”) is one notch lower than the Anchor Credit Evaluation (“ACE”) of the consolidated FCMB Group (“the Group”), due to structural subordination. This reflects the Non-Operating Holding Company’s (“NOHC”) reliance on cash flows and dividends from First City Monument Bank Limited (the core entity within the Group), which could be diverted by regulatory intervention at a time of stress.

FCMB Group Plc is a financial service holding company in Nigeria with core operations in banking and an increasing presence in non-bank financial services through its other subsidiaries. The Group had seven direct subsidiaries and four indirect subsidiaries as of December 2021, with growing franchise strengths across different financial service areas including microlending, asset and wealth management, and investment banking.

For more information on the ratings of the Group read, ‘GCR upgrades First City Monument Bank Limited’s National Scale Long-term Issuer Rating to A-_(NG) from BBB+_(NG) and affirms the Short-term Issuer Rating of A2_(NG); Outlook Stable’

Outlook Statement

The Stable Outlook reflects GCR’s expectations that the Group’s growth and diversification strategy would continue to enhance the contribution of the non-bank subsidiaries to the Group’s earnings profile; albeit the bank is expected to remain the core operating entity over the rating horizon.

Rating Triggers

The ratings of the Company will follow the creditworthiness of the Group.

Ratings History

FCMB Group Plc

Risk Score Summary

Salient Points of Accorded Rating

GCR affirms that a.) no part of the rating process was influenced by any other business activities of the credit rating agency; b.) the ratings were based solely on the merits of the rated entity, security or financial instrument being rated; and c.) such ratings were an independent evaluation of the risks and merits of the rated entity, security or financial instrument.

The credit ratings have been disclosed to the rated entities. The ratings above were solicited by, or on behalf of, the rated entities, and therefore, GCR has been compensated for the provision of the ratings.

The rated entities participated in the rating process via face-to-face management meetings, as well as other written correspondence. Furthermore, the quality of information received was considered adequate and has been independently verified where possible. The information received from the rated entity and other reliable third parties to accord the credit ratings included:

• The audited financial results as at 31 December 2021
• Unaudited interim account for 1Q FY22
• Four years of comparative audited numbers
• Other related documents