FCMB Group Plc has moved to allay investor concerns following a new directive from the Central Bank of Nigeria, which halts dividend payments and imposes stricter oversight on banks with unresolved forbearance loans or breaches of the Single Obligor Limit.

In a statement on Monday, the bank revealed it had reduced its forbearance-related loan exposure by more than 60%, from ₦538.8 billion in September 2024 to ₦207.6 billion as of May 31, 2025.

The loans, linked to three entities and two obligors, are currently classified as Stage 2 under IFRS 9.

However, the bank noted that it has consistently made adequate provisions for them and anticipates a full resolution in the near term.

FCMB stated that it has been provisioning for these exposures over the past few years, noting that intensified resolution efforts have led to a more than 60% reduction in its forbearance loan portfolio.

“The Bank has made provisions for these loans over the last few years, and intensified resolution efforts have led to over 60% reduction in its credit forbearance exposures,” it said.

The Group anticipates that the loans will fully exit the forbearance regime in the near term, which may cause a temporary rise in Stage 3 non-performing loans—peaking at approximately 11.5% of the total loan portfolio. However, the ratio is expected to decline to below 10% by year-end, supported by projected loan growth.

FCMB also disclosed that it is addressing a temporary breach of the CBN’s Single Obligor Limit by converting a ₦23.1 billion loan into equity—a move expected to raise its capital base to approximately ₦267 billion, keeping it well above regulatory requirements.

The Group noted that it has already received CBN approval for the capital verification of the convertible loan and is currently securing the remaining necessary regulatory approvals.

FCMB said its diversified group earnings position it to weather the temporary dividend restrictions imposed on its banking subsidiary.

In 2024, the Nigerian banking arm contributed 46% of total dividends paid to shareholders, while 54% came from the Group’s non-bank subsidiaries.

“We expect to have sufficient buffers to maintain our dividend policy for the 2025 financial year and the immediate subsequent years,” the statement read.