FCMB Plans To Use N20.68b To Avert Liquidation After Silicon Valley Bank Collapse

Amid concerns in the international banking sector over the currrent financial crisis, FMCB Group has borrowed N20.68 billion to protect against insolvency following Silicon Valley Bank and Signature Bank collapsed in Unted States.

In order to enhance the liquidity of its subsidiary, FCMB, FCMB Group borrowed N20.68 billion from the bond market amid concerns that additional banks might fail.

It was gathered that the money was acquired in order to raise FCMB’s capital adequacy ratios, which gauge a bank’s capital base in relation to credit risk exposures.

To make sure a bank like FCMB can withstand a reasonable amount of loss before running the risk of going bankrupt, regulators keep an eye on capital adequacy ratios.

According to FCMB Group, the borrowed money collected through its N300,000,000 Debt Issue Programme in the Nigerian capital market would be used to support FCMB, the Group’s banking subsidiary, to increase its overall capital adequacy ratios, which will safeguard the firm’s financial stability.

• Ododo arrives Ondo To Conduct APC primary
• Port Harcourt refinery almost 90% completed –Senate committee
• Israeli drones downed after explosions heard in Iran’s Isfahan
• Condemnations as US blocks Palestine’s full UN membership
• NEDC presents life-saving equipment, drugs to hospital in Borno

Recall that the United States saw its largest bank failure since the 2008 financial crisis, when Silicon Valley Bank failed.

Silicon Valley Bank failed as rising interest rates impacted its 55% stake in US government bonds, making the investment less profitable and more of a loss after it was sold before maturity to fulfill the withdrawal requests of numerous clients who had to spend more owing to inflation.

According to the lender’s profits prediction, FCMB would only make N89.17 billion in the second quarter of this year, falling short of the N126.22 billion it made in the same period last year.