Q2 2026 FCMB Group Plc Earnings Call

August 3, 2026

Speaker #2: Good day, and thank you for standing by. Welcome to the FCMB Group Q3, first half 2026 conference call and webcast. At this time, all participants are in listen-only mode.

Operator: Good day, thank you for standing by. Welcome to the FCMB Group Plc H1 2026 Conference Call and Webcast. At this time, all participants are in listen only mode. After the speaker's presentation, there will be the question and answer session. To ask a question during the session, you need to press star one one on your telephone keypad. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one and one again. If you wish to ask a question via the webcast, please use your Q&A box available on the webcast link at any time during the live event. Please be advised today's conference is being recorded. I would now like to hand the conference over to our first speaker today, Mr. Ladi Balogun, Group CEO. Please go ahead, sir.

Speaker #2: After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you need to press *11 on your telephone keypad.

Speaker #2: You won't hear an automated message advising that your hand is raised. To withdraw a question, please press *11 again. If you wish to ask a question via the webcast, please use the Q&A box available on the webcast link at any time during the live event.

Speaker #2: Please be advised that today's conference is being recorded. I would now like to hand the conference over to our first speaker today, Mr. Ladi Balogun, Group CEO.

Speaker #2: Please go ahead, sir.

Speaker #3: Good afternoon, ladies and gentlemen, and welcome once again to our H1 2026 Investors and Analysts presentation. I have with me in the room my colleagues from the holding company who will be supporting me in this presentation.

Ladi Balogun: Good afternoon, ladies and gentlemen, welcome once again to our H1 2026 investors and analysts presentation. I have with me in the room my colleagues from the holding company that will be supporting me in this presentation, Mr. Gbolahan Joshua, the Group Chief Operating Officer, and Mr. Deji Fayose, the Group Chief Financial Officer, and they will be taking various aspects of the presentation before you. We also have on hand to be able to answer questions, the CEO of the bank, Mrs. Yemisi Edun; the CEO of our asset management business, Mr. James Ilori; CEO of Credit Direct, Mr. Chukwuma Nwanze; and standing in for the Chief Risk Officer who's currently on leave, is Mrs. Bimpe Onanuga. If we move to the next slide, just to give you a sense of the agenda that we'll be going through today, which is consistent with other presentations we've made.

Speaker #3: Mr. Bolano Joshua, the Group Chief Operating Officer, and Mr. Didi Fayose, the Group Chief Financial Officer, will be taking various aspects of the presentation before you.

Speaker #3: We also have on hand to be able to answer questions: the CEO of the bank, Mrs. Yemisi Edun; the CEO of our asset management business, Mr. James Laurie; the CEO of Credit Direct, Mr. Cho Somanze; and standing in for the Chief Risk Officer, who's currently on leave, is Mr. Bingpe Anonoga.

Speaker #3: If we move to the next slide, just to give you a sense of the agenda that we'll be going through today, which is consistent with other presentations we've made.

Speaker #3: I will walk you through the highlights of the 2026 H1 performance, as well as our strategic updates. I will then hand over to the Group CFO, who will take us through the performance review of the Group, the Bank, and non-banking divisions. The Chief Operating Officer will take us through the digital business review, and I will summarize with the outlook.

Ladi Balogun: I will walk you through the highlights of the 2026 H1 performance, as well as our strategic updates, and then hand over to the group CFO that will take us through the performance review of the group, the bank, and non-banking divisions. Chief operating officer will take us through the digital business review, and I will summarize with the outlook. Moving on to slide four, where you can see the highlights of our performance. H1 has shown strong growth across all our indices, profitability being the most notable. Margins, particularly net interest margins, also very healthy, and our efficiency ratios are moving in the right direction. Our funding mix has also improved significantly, and we are seeing very strong growth across many of our indices.

Speaker #3: So, moving on to slide 4, where you can see the highlights of our performance. H1 has shown strong growth across all our indices, with profitability being the most notable.

Speaker #3: Margins, particularly net interest margins, are also very healthy. Our efficiency ratios are moving in the right direction, and our funding mix has also improved significantly.

Speaker #3: And we are seeing very strong growth across many of our indices. So, key ones that I'd like to highlight are the improvements we're seeing in the low-cost deposit mix, which has moved from 65% to 74.9%.

Ladi Balogun: Key ones that I'd like to highlight is the improvement that we're seeing in low-cost deposit mix, that has moved from 65% to 74.9%. This is key because it plays an important role in reducing our cost of funds and boosting our NIMs. Also important to note that PBT, as has been widely reported, is up 98.8% year-on-year. ROE stands at 27.9%, which is 470 basis points improvement on where we were at the full year 2025. Cost income ratio has also improved materially to 41.4%. We think we could be sustainably below 50% going forward. Net interest margin is also very healthy at 11.2%.

Speaker #3: This is key because it plays an important role in reducing our cost of funds and boosting our NIMs. Also important to note is that PBT, as has been widely reported, is up 98.8% year on year.

Speaker #3: ROE stands at 27.9%, which is a 470 basis points improvement on where we were at the four-year 2025. Cost-to-income ratio has also improved materially to 41.4%.

Speaker #3: We think we're going to be sustainably below 50% going forward. Net interest margins are also very healthy at 11.2%. This has been driven partly by the growth in interest income, supported by our retail and SME lending businesses, as well as the continued reduction in cost of funds.

Ladi Balogun: This has been driven partly by the growth in interest income supported by our retail and SME lending businesses, as well as the continued reduction in cost of funds. Steady growth in our customer base rising to 17 million since the year end. On the next slide, just talking about some of the key things that are driving the performance in H1. The recapitalization of the bank has played a key role. I think we had highlighted at the time of our various capital raises that one of the impacts that we think this would have is it would enable us to pay down on more expensive fixed deposits and focus much of our growth on the deposit side on current and savings accounts.

Speaker #3: And steady growth in our customer base, rising to 17 million since the year-end. So, on the next slide, we'll discuss some of the key things that are driving performance in H1.

Speaker #3: The recapitalization of the bank has played a key role. I think we had highlighted at the time of our various capital raises that one of the impacts we think this would have is it would enable us to pay down more expensive fixed deposits.

Speaker #3: And focus much of our growth on the deposit side, on current and savings accounts. We've seen current and savings accounts growing now in the range of about 20% plus.

Ladi Balogun: We've seen current and savings accounts growing now in the range of about 20%+, and our fixed deposits have been generally in decline, either as a result of pay down from recapitalization or replacement with low-cost deposit funds. We are also doing well when it comes to diversification of our business. We've seen that all parts of the group are growing strongly, not just the banking side of the business. We are continuing to clean up the loan book, following the end of forbearance in 2025. Core lending has grown quite strongly to NGN 269 billion. Sorry, NGN 269 billion. That's the growth that we've seen, 26% year-on-year growth. Retail, SME, and consumer lending have driven that. Digital lending revenues have also grown steadily by about 32%, now representing about 13% of earnings.

Speaker #3: And our fixed deposits have been generally in decline, either as a result of paydown from recapitalization or replacement with low-cost deposit funds. We are also doing well when it comes to diversification of our business.

Speaker #3: We've seen that all parts of the group are growing strongly, not just the banking side of the business. And we are continuing to clean up the loan book following the end of forbearance in 2025.

Speaker #3: Core lending has grown quite strongly to ₦260.9 billion—sorry, ₦269 billion. That's the growth that we've seen: 26% year-on-year growth. Retail, SME, and consumer lending have driven that.

Speaker #3: Digital lending revenues have also grown steadily by about 32%, now representing about 13% of earnings. As mentioned earlier, our cost-to-income ratio is trending in the right direction, down to 41.4% from 53.8%.

Ladi Balogun: As mentioned earlier, our cost income ratio is trending in the right direction, down to 41.4%, down from 53.8%. This has been driven partly by digital transformation, where we're seeing our costs growing a lot more slowly, and our revenue outpacing the cost growth. We are also able to achieve much of our growth from the wholesale banking side of the business that is less dependent on our branch network or human sales. Therefore, the operating expenses on the wholesale banking side of the business is not growing as fast as the revenue. The combination of digital transformation and much of our growth coming from the wholesale banking side of the business has supported the widening of the jaws, and therefore a much better cost income ratio. Net interest margin at 11.2% shows a healthy balance sheet from an efficiency point of view.

Speaker #3: This has been driven partly by digital transformation, where we're seeing our costs growing a lot more slowly and our revenue outpacing the cost growth.

Speaker #3: We were also able to achieve much of our growth from the wholesale banking side of the business, which is less dependent on our branch network or human sales.

Speaker #3: Therefore, the operating expenses on the wholesale banking side of the business are not growing as fast as the revenue. The combination of digital transformation and the fact that much of our growth is coming from the wholesale banking side of the business has supported the widening of the jaws, and therefore, a much better cost-to-income ratio.

Speaker #3: Net interest margins, at 11.2%, show a healthy balance sheet from an efficiency point of view. As mentioned earlier, low-cost deposit growth and the injection of fresh capital have played a key part on the cost of funds side, while our retail and SME lending and credit direct have supported the yield on earning assets.

Ladi Balogun: As mentioned earlier, the low cost deposit growth and the injection of fresh capital have played a key part on the cost of funds side, whilst our retail and SME lending and Credit Direct have supported the yield on earning assets. Our non-banking business continues to grow significantly, and we expect that this will continue. We had about 185% year-on-year growth in the non-banking subsidiaries PBT at NGN 40.7 billion. We also have been proactive in actively resolving Stage 2 loans to improve asset quality. We increased our impairments by NGN 85.9 billion, and also wrote off about NGN 63.4 billion to get coverage up and restore our NPL ratio significantly below 5% using IFRS, and just slightly above 5% at 5.2 at Nigerian NGAAP. That's the summary, and I will hand over to Deji Fayose to take us through a more detailed analysis of the performance.

Speaker #3: Our non-banking business continues to grow significantly, and we expect that this will continue. We had about 185% year-on-year growth in the non-banking subsidiaries' PBT.

Speaker #3: At ₦40.7 billion. We also have been proactive in actively resolving stage two loans to improve asset quality. We increased our impairments by ₦85.9 billion.

Speaker #3: And also wrote off about 63.4 billion Naira. To get coverage up and restore our NPL ratio significantly below 5% using IFRS. And just slightly above 10% just slightly above 5% at 5.2.

Speaker #3: At Nigerian NGAP. So, that's the summary. I will now hand over to Jiji Fauche, who will take us through a more detailed analysis of the performance.

Speaker #2: Thank you, Larry, and good afternoon. I'm happy to take you through our Q2 group results, starting with slides 6 to 14, which cover the group results overview.

Deji Fayose: Thank you, Larry, and good afternoon all. I'll now proceed to take you through our H1 group results, starting with slides six to 14, which covers the group results overview. On the screen now we have slide seven, which is just a visual summary of our income conversion to profit for the H1 of the year. Interest and similar income of NGN 600.5 billion net of interest expenses delivered a net interest income of NGN 296 billion, which when we layer in our non-interest income of NGN 15 billion delivered an operating income of NGN 415 billion. Inclusive of operating expenses of NGN 102 billion and an impairment charge of NGN 85 billion to get H1. The group delivered a profit before tax of NGN 107.3 billion and a profit after tax of NGN 139.9 billion. This gave rise to a 99% year-on-year growth in PBT, all driven by core earnings within the group.

Speaker #2: On the screen now, we have slide 7, which is just a visual summary of our income conversion profit for the first half of the year.

Speaker #2: Interest and similar income of ₦600.5 billion. Net of interest expenses delivered a net interest income of ₦356 billion. We then further layer in our non-interest income of ₦58 billion.

Speaker #2: Delivered an operating income of ₦415 billion, inclusive of operating expenses of around ₦2 billion and an impairment charge of ₦5 billion that would take out H1.

Deji Fayose: Inclusive of operating expenses of NGN 102 billion and an impairment charge of NGN 85 billion to get H1. The group delivered a profit before tax of NGN 107.3 billion and a profit after tax of NGN 139.9 billion. This gave rise to a 99% year-on-year growth in PBT, all driven by core earnings within the group.

Speaker #2: The group delivered a profit before tax of 7.3 billion, and a profit after tax of 139.9 billion. This gave rise to a 99% year-on-year growth in PBT.

Speaker #2: All driven by core earnings within the group. The next slide is a snapshot of our group income statement on slide 8, where gross earnings have grown by 28% year-on-year.

Deji Fayose: The next slide is a snapshot of our group income statement on slide eight, where gross earnings have grown by 20% year-on-year, driven by growth in net interest income of 7%, despite a slight decline in non-interest income of 4%. On a quarter-on-quarter basis, gross earnings have grown by 11% as at the end of second quarter, while operating income has also grown by 132%. Further details of the main drivers of our financial performance will be discussed in the subsequent slides. Slide nine, please. Slide nine is a group earnings contribution from our respective subsidiaries. Contribution from the Nigerian banks stood at 74%, moderating from 85% in prior year, largely due to a NGN 9.3 billion gain requiring a holding company for a minority stake, their investment in our Pensions business, which we discussed in the last quarter.

Speaker #2: Driven by a growth in net interest income of 72%, despite a slight decline in non-interest income of 4%. On a cost and quarterly basis, gross earnings have grown by 11%.

Speaker #2: As at the end of the second quarter, our operating income has also grown by 132%. Further details of the main drivers of our financial performance will be discussed in the subsequent slides.

Speaker #2: Slide 9, please. Slide 9 is the group earnings contribution. From our respective subsidiaries, contribution from the Nigerian banks is at 74%, moderating from 85% in the prior year.

Speaker #2: Likely due to a $9.3 billion gain recorded in the holding company from a minority stake in our pensions business, which we discussed in the last quarter.

Deji Fayose: Also, on a quarter-on-quarter basis, the loss in our UK business declined by 7% from GBP 3.7 million in Q1 to about GBP 110 million as at H1. In addition, we expect that the franchise will return to profitability by the end of the year as it advances its transaction banking and liability strategy. Slide 10 provides further details on our H1 group earnings. The 20% year-on-year growth in gross earnings, as previously mentioned, was driven by 7% growth in interest income to NGN 600 billion from higher yields on an expanding earning asset base. Interest expense also declined by 2.7% year-on-year, reflecting an improved funding mix and lower cost of funds. This has led to a 7% year-on-year growth in net interest income, where we have closed at NGN 363 billion.

Speaker #2: Also, on a quarter-on-quarter basis, the loss in our UK business declined by 72%, from ₦37 million in Q1 to about ₦110 million for the half year.

Speaker #2: In addition, we expect that the franchise will return to profitability by the end of the year as it advances its transaction banking and liability list strategy.

Speaker #2: Slide 10 provides further details on our half-year group earnings. The 28% year-on-year growth in gross earnings, as previously mentioned, was driven by a 71% growth in interest income to ₦600 billion.

Speaker #2: From higher yields and an expanding earnings asset base. Interest expense also declined by 2.7% year-on-year, reflecting an improved funding mix and lower cost of funds.

Speaker #2: This has led to a 70% year-on-year growth in net interest income, where we have closed at ₦356.3 billion. Non-interest income declined by 4.1%.

Deji Fayose: Non-interest income, despite a decline of 4.1% to NGN 58.8 billion, which was largely driven by currency valuation losses and lower trading income, grew quarter-on-quarter by 132% to NGN 41.1 billion as we saw trading income recover and our valuation losses ease into the quarter. Slide 11 touches on the group margin analysis, where net interest margins improved from 9.1% in H1 2025 to 11.2% as at H1 2026. Cost of funds declined year-on-year to 7.7% at the end of H1 from 8.3% at the end of 2025. This is largely driven by an improved funding mix and a stronger low-cost deposit mobilization.

Speaker #2: To ₦58.8 billion, which was largely driven by currency valuation losses and lower trading income. Group quarter-on-quarter by 132% to ₦41.1 billion. As we saw, trading income recovered.

Speaker #2: And our valuation loss is eased into the quarter. Slide 11 touches on the group margin analysis, where net interest margins improved from 9.1% in Q1 2025 to 11.2% as of H1 2026.

Speaker #2: Cost of funds declined year-on-year to 7.7% at the end of the half year, from 8.3% at the end of 2025. This is largely driven by an improved funding mix and stronger low-cost liability mobilization.

Speaker #2: Our low-cost ability mix improved from 65.4% in December 2025 to 71.1% at the end of March 2026, and further to 74.9% as of June 2026.

Deji Fayose: Our low-cost deposit mix improved from 65.4% in December 2025 to 71.1% at the end of March 2026, and further to 74.9% as at June 2026. Yields on earning assets have also improved year-on-year, closing at 22.1% as at H1 from 20.2% in the previous year. Slide 12 is on our group operating expenses, where we see that cost growth continues to moderate with operating expenses up 12.3% year-on-year to NGN 102.1 billion as at H1, reflecting sustained cost discipline, the benefit of slow inflation, and a sharper focus on our cost to income ratio. Notably, operating expenses declined 2% quarter-on-quarter to NGN 85.2 billion at the end of the quarter.

Speaker #2: Yields on earning assets have also improved year-on-year, closing at 22.1% for the half-year, up from 20.2% in the previous year. Slide 12 is on our group operating expenses.

Speaker #2: We see that cost growth continues to moderate, with operating expenses up 12.3% year-on-year to ₦172.1 billion for the half-year. This reflects sustained cost discipline, the benefit of slow inflation, and a sharper focus on our cost-to-income ratio.

Speaker #2: Notably, operating expenses declined 2% quarter-on-quarter to ₦85.2 billion at the end of the quarter. In addition, the increased contribution from our treasury sales and trading, wholesale banking, and our digital financial services across wealth, retail, and SMEs is driving efficiency, enabling revenue growth to outpace our expenses growth.

Deji Fayose: In addition, the increased contribution from our treasury sales and trading, wholesale banking, and our digital financial services across wealth, retail, and SMEs is driving efficiency and every revenue growth to outpace our expenses growth. As a result, group CI improved to 41.4% as at H1 from 57% in H1 2025. All the above have resulted in profit before tax growing by 39% year-on-year to NGN 107 billion from NGN 7.1 billion in H1 2025. Our return on average assets, our return on average equity also strengthening to 3.5% and 27.9% respectively as at H1 from 2% and 20.6% as at H1 2025.

Speaker #2: As a result, group CI improved to 49.4% for the half-year, from 57% on January 8, 2025. All the above have resulted in profit before tax ranging up to 99% year-on-year.

Speaker #2: To run up to 7 billion, from 79.1 billion on 1/8/2025. Our return on average assets and return on average equity also strengthened to 3.5% and 27.9%, respectively, for the half year.

Speaker #2: From 2% to 20.6% as of 1/8/2025. And I think, importantly, this was achieved despite the ₦227 billion capital injection that we had during the second quarter.

Deji Fayose: I think importantly, this was achieved despite a NGN 207 billion capital injection that we had in Q2. It sort of reflects sustained profitability momentum as profits nearly doubled year-on-year. Slide 14, please. Slide 14 provides a detailed update on the normalization of our asset quality following the accelerated resolution of our Stage 2 exposures during H1 of the year. The bank itself, its potential non-performing loan ratios improved to 5.2% in H1 2026 from 16.97% in December 2025, which now falls within regulatory thresholds. However, it is also subject to regulatory approval, which is ongoing. This was largely driven by the following.

Speaker #2: So it sort of reflects sustained profitability momentum, as profits nearly doubled year-on-year. Slide 14, please. Slide 14 provides a detailed update on the normalization of our asset quality.

Speaker #2: Following the accelerated resolution of our stage two exposures during the first half of the year, the banking subsidiaries' potential non-performing loan ratios improved to 5.2% in Q2 2026.

Speaker #2: From 16.97% in December 2025, which now falls within the regulatory thresholds. However, it's also subject to regulatory approval, which is ongoing. This was largely driven by the following.

Speaker #2: Required a net growth in the loan book of ₦100 billion, a reduction in our end-gap NPLs of ₦21 billion, and a total impairment charge of ₦93.4 billion absorbed in Q2 2026.

Deji Fayose: We created a net growth in the loan book of GBP 100 billion, a reduction in our NGAAP NPLs of GBP 201 billion, and a total impairment charge of GBP 3.4 billion observed in 1 August 2026. The movement in NPLs is also shown as follows. From a December 2025 opening position of GBP 210 billion, we have taken in write-offs of GBP 60.4 billion and customer paydowns of GBP 74.9 billion. We have also Structure the legacy oil and gas exposure of GBP 7.2 billion, and we had net other movements of circa GBP 4 billion. All of this has contributed to NPL closing at GBP 108.7 billion at the end of June 2026, giving rise to the NPL figure of 5.2%. Thank you. I will now please take you through slides 15 to 19, which covers our banking division review for 1 August 2026.

Speaker #2: The movement in NPLs is also shown as we consult as follows. From a December 2025 opening position of ₦210 billion, we have taken write-offs of ₦60.4 billion.

Speaker #2: And customer paid balances of ₦74.9 billion. We have also restructured the live legacy oil and gas exposure of ₦7.2 billion, and we had net other movements of circa ₦4 billion.

Speaker #2: All of this has contributed to NPL closing at ₦108.7 billion at the end of June 2026, giving rise to the NPL figure of 5.2%.

Speaker #2: Thank you. I will now please take you through slides 15 to 19, which cover our banking division review for 1/8/2026. Slide 16, please. The banking subsidiary group was seized by 10% yesterday to ₦5 trillion.

Deji Fayose: Slide 16, please. The banking subsidiary group deposits by 10% year to date to GBP 5 trillion, with a low-cost deposit mix improvement by 960 basis points to 4.6%, while loans and advances also grew 4% year-on-year to GBP 2.3 trillion. The banking franchise profitability was also strong, with PBT growing 8% year-on-year to GBP 116 billion from GBP 64.8 billion in 1 August 2025. Return on average equity improved to 23.5%, while CIR improved to 42.4% from 44.6% in the prior year, an improvement of 1,200 basis points. Slide 17 highlights our business segment contribution within the banking subsidiary. Deposits were evenly distributed at approximately 48% each between wholesale and retail banking. Wholesale banking drove lending, accounting for 69% of loans, and our treasury and financial market business led profitability, contributing 46% of profit before tax in 1 August 2026.

Speaker #2: The low-cost deposit mix improved by 960 basis points to 74.6%. Loans and advances also grew 4% year-on-year to ₦2.3 trillion. In the banking franchise, profitability was also strong, with PBT growing 80% year-on-year to ₦116 billion.

Speaker #2: From ₦64.8 billion in Q1 2025. Return on average equity improved to 23.5%, while CIR improved to 42.4% from 64.6% in the prior year—an improvement of 1,200 basis points.

Speaker #2: Slide 17 highlights our business segment contribution within the banking subsidiary. Deposits were evenly distributed at approximately 48% each between wholesale and retail banking. Wholesale banking drove lending, accounting for 69% of loans. Our treasury and financial market business led profitability, contributing 2% of profit before tax in Q2 2026.

Speaker #2: Slide 18 reports the loan portfolio classification by sector, where the loan book remains well diversified, with no single sector accounting for more than 15% of the portfolio.

Deji Fayose: Slide 18 reports the loan portfolio classification by sector, where the loan book remains well diversified, with no single sector accounting for more than 7% of the portfolio, and largely led by the finance and insurance and manufacturing sectors. Slide 19 shows the Stage 3 loans breakdown by sector. We obviously have Stage 3 loans reduced to 4.7% of the loan book as at 1 August 2026, from 6.1% as at full year 2025. An 18% reduction driven by write-offs and paydowns, as discussed earlier. Notwithstanding a power and energy exposure that was migrated from Stage 2 to Stage 3 during the period. Next slide, please. I will now please take you through slides 20 to 24, which highlights the performance of our non-banking divisions. Starting with consumer finance business on slide 21. Gross earnings and PBT grew year-on-year by 58% and 90% respectively.

Speaker #2: And largely led by the finance and insurance and manufacturing sectors. Slide 19 shows the Stage 3 loans breakdown by sector, where we see that Stage 3 loans reduced to 4.7% of the loan book, as of August 1, 2026, from 6.1% as of full year 2025.

Speaker #2: An 18% reduction driven by write-offs and paydowns, as discussed earlier. Notwithstanding, a planned energy exposure was migrated from Stage Two to Stage Three during the period.

Speaker #2: Next slide, please. I will now take you through slide 2024, which highlights the performance of our non-banking divisions. Starting with the consumer and finance business on slide 21.

Speaker #2: Gross earnings and PBT grew year-on-year by 58% and 92%, respectively. Our investment banking business also grew gross earnings and PBT year-on-year by 20.6%, while our investment management business recorded a 41% and 4% growth in gross earnings and PBT as well.

Deji Fayose: Our investment banking business also grew gross earnings and PBT year-on-year by 20% and 7% while our investment management business recorded a 41% and 40% growth in gross earnings and PBT as well. Group AUM, led by our pensions franchise, grew by 14% year to date to GBP 1.9 trillion. Further details on our non-banking division performance as follows. On slide 22, consumer finance. The business acquired 37 new customers in H1, with a 30% year-on-year growth in disbursements. Revenue from digital retail loans also grew 50% year-on-year, from GBP 28 billion in 1 August 2025 to GBP 44.3 billion at the end of 2026. The loan book also grew by 56% year-on-year to GBP 207.5 billion, while the business divided cost income ratio of 44%, a 710 basis point improvement year-on-year.

Speaker #2: Group AUM, led by our pension franchise, grew by 14% yesterday to ₦1.9 trillion. Further details on our non-banking division performance are as follows. On slide 22, consumer and finance.

Speaker #2: The business acquired 37,714 new customers in Q1, with a 30% year-on-year growth in disbursements. Revenue from digital-related loans also grew 7% year-on-year, from ₦28 billion in Q1 2025 to ₦44.3 billion at the end of 2026.

Speaker #2: The loan book also grew by 50% year-on-year, to ₦107.5 billion. While the business delivered a cost-to-income ratio of 44%, a 710 basis point improvement year-on-year.

Speaker #2: NPL for the consumer and finance business closed at 7.4%, largely driven by temporary payroll deduction suspensions across three states: Niger, Canada, and Oshu. To sort out data acting up issues and adjust for this exceptional exposure, the online portfolio NPL ratio stands at about 4.2%, below the FY2025 NPL of 7.3% and well within the regulatory threshold of 10%.

Deji Fayose: NPL for the consumer finance business closed at 7.4%, largely driven by temporary payroll deduction suspensions across three states, Niger, Kano, and Osun, to sort out tax issues. Adjusting for these exceptional exposures, the underlying portfolio NPL ratio stands at about 4.2%, below FY 2025 NPL of 7.3% and well within regulatory threshold of 10%. Payroll deductions have resumed in Q2 2026, starting with Kano, and we expect that the rest will also continue into the rest of the quarter. On slide 23, investment banking. Gross earnings and PBT for the division grew year-on-year by 20% and 7%. Our stockbroking business delivered broad-based revenue growth led by 170% year-on-year rise in traded value to NGN 251 billion, gradually approaching the full year FY 2025 level of NGN 26 billion. With traded income growing to NGN 512 million from NGN 206 million in 01 August 2025.

Speaker #2: Payroll deductions are resumed in Q3 2026, starting with Canada, and we expect that the rest will also continue into the rest of the quarter.

Speaker #2: On slide 23, investment banking: Gross earnings and PBT for the division grew year-on-year by 20% and 76%. Our stockbroking business delivered broad-based revenue growth, led by a 170% year-on-year rise in traded value to ₦251 billion.

Speaker #2: Gradually approaching the full-year FY2025 level of ₦66 billion, with trading income growing to ₦512 million from ₦26 million in Q1 2025. Our capital markets business also recorded a 39% year-on-year decline in PBT, reflecting an exceptionally high prior year fee base and a weakening of the franchise.

Deji Fayose: Our capital markets business also recorded a 13% year-on-year decline in PBT, reflecting an exceptionally high prior year fee base last year rather than a weakening of the franchise. Obviously, a lot of activities in the previous year from the equity side compared to current year. Activity, however, remains robust, with executed mandates rising to 42 from 36 in 01 August 2025, and we expect that this momentum will continue across the investment banking business in H2 of the year. For the investment management franchise, assets under management grew to NGN 1.95 trillion, 14% at the end of 01 August 2025, from NGN 1.7 trillion at the end of 2025, with our pensions business accounting for 70% of our assets under management. The AUM from digital products also increased by 95% year-on-year, whilst management fees have increased by 81% year-on-year.

Speaker #2: But we saw a lot of activity last year from the equity side compared to this current year. Activity, however, remains robust, with executive mandates rising to 42 from 36 as of January 8, 2025.

Speaker #2: And we expect that this momentum will continue across the investment banking business in the second half of the year. For investment management, franchise assets under management grew to ₦1.95 trillion, up 14% at the end of Q2 2025, from ₦1.7 trillion at the end of 2024, with our pension business accounting for 70% of our assets under management.

Speaker #2: The AUM from digital products also increased by 95% year-on-year, while management fees have increased by 81% year-on-year. Our number of retirement savings accounts has also grown, 4% year-on-year, with graduations by digital platforms contributing 40% of this increase.

Deji Fayose: Our number of retirement savings accounts have also grown 4% year-on-year, with reductions via digital platforms contributing 40% of this increase and a net inflow of NGN 4.55 billion from the transfer window. Overall, investment management PBT increased by 50% year-on-year, to NGN 5.74 billion, with the pensions business accounting for 54% of PBT and the other business lines contributing 46%. I will now please hand over to our Group CEO, Bola Joshua, to take you through our digital business review. Thank you.

Deji Fayose: Our number of retirement savings accounts have also grown 4% year-on-year, with reductions via digital platforms contributing 40% of this increase and a net inflow of NGN 4.55 billion from the transfer window. Overall, investment management PBT increased by 50% year-on-year, to NGN 5.74 billion, with the pensions business accounting for 54% of PBT and the other business lines contributing 46%. I will now please hand over to our Group CEO, Gbolahan Joshua, to take you through our digital business review. Thank you.

Speaker #2: And the net inflow of ₦4.55 billion from the transfer of wages from the transfer window. Overall, investment management PBT increased by 50% year-on-year, to ₦5.74 billion, with the pensions business accounting for 4% of PBT and the other business lines contributing the remaining 6%.

Speaker #2: I will now please hand you over to our Group CEO, Bola Joshua, to take you through our digital business review. Thank you.

Speaker #1: Thank you, DG. Good afternoon, everyone. My name is Bola Joshua. I'll be taking us through our digital business, covering lending, payments, and wealth on slides 25 to 31.

Gbolahan Joshua: Thank you, Gigi. Good afternoon, everyone. My name is Bolanle Joshua. I will be taking us through our digital business covering lending, payments, and wealth on slides 25 to 31. Slide 26 just shows key highlights of our digital business. We generated revenues of NGN 89.1 billion. It is up 32% year-on-year from NGN 67.7 billion in H1 2025. Digital now accounts for 13.2% of gross earnings, largely driven by lending and payments. Loan disbursements are up 26% to about 958,000 customers. Almost NGN 270 billion disbursed. Total portfolio has grown by 12% year-on-year. It is now about NGN 290 billion, and this portfolio is split 58/42% between retail and SME. For our mobile and internet banking users, they have grown 4% year to date to 7.7 million customers. Slide 27 just shows the trend on customer acquisition. Q2 2025, we have moved from 15 million customers to almost 17 million Q2 2026.

Gbolahan Joshua: Thank you, Deji. Good afternoon, everyone. My name is Gbolahan Joshua. I will be taking us through our digital business covering lending, payments, and wealth on slides 25 to 31. Slide 26 just shows key highlights of our digital business. We generated revenues of NGN 89.1 billion. It is up 32% year-on-year from NGN 67.7 billion in H1 2025. Digital now accounts for 13.2% of gross earnings, largely driven by lending and payments. Loan disbursements are up 26% to about 958,000 customers.

Speaker #1: Slide 26 just shows key highlights of our digital business. We generated revenues of ₦89.1 billion, which is up 32% year-on-year from ₦67.7 billion in H1 2025.

Speaker #1: Digital now accounts for 13.2% of gross earnings, largely driven by lending and payments. Loan disbursements are up 26% to about 958,000 customers, with almost ₦270 billion disbursed. The total portfolio has gone up by 12% year-on-year.

Gbolahan Joshua: Almost NGN 270 billion disbursed. Total portfolio has grown by 12% year-on-year. It is now about NGN 290 billion, and this portfolio is split 58/42% between retail and SME. For our mobile and internet banking users, they have grown 4% year to date to 7.7 million customers. Slide 27 just shows the trend on customer acquisition. Q2 2025, we have moved from 15 million customers to almost 17 million Q2 2026.

Speaker #1: It's now about ₦290 billion. And this portfolio is split 58-42% between retail and SME. For our mobile and internet banking users, they've grown 4% year-to-date to 7.7 million customers.

Speaker #1: Slide 27 just shows the trend on customer acquisition. Q2 2025, we've moved from 15 million customers to almost 17 million in Q2 2026, acquired about 1.9 million customers over the last one year. Forty-five percent of those customers enrolled on our mobile and internet banking channels.

Gbolahan Joshua: Acquired about 1.9 million customers over the last 1 year. 45% of these customers enrolled on our mobile and internet banking channels. For 2026, we've acquired about 700,000 customers. Slide 28 shows the breakdown of the revenues. 48% of the revenues coming from our non-bank subsidiaries, 52% from the bank. Lending leads with about 83.7% of total revenues, grown by about 41% year on year to 74.6 billion. Lending revenues are split 66/34% between the retail and SME business. Payments accounts for 13% of total revenues, wealth for 3.3%. We're seeing strong growth of 62% year on year in the wealth business from about 1.9 billion to 3.1 billion. Slide 29 shows the trend of our digital revenues. It's moved from 13.9 billion in Q2 2025 to 48.3 billion Q2 standalone quarter 2026, 35% year on year growth, just looking at the two quarters.

Speaker #1: And for 2026, we've acquired about 700,000 customers. Slide 28 shows the breakdown of the revenues: 48% of the revenues coming from our non-bank subsidiaries, 52% from the bank.

Speaker #1: Lending leads with about 83.7% of total revenues, growing by about 41% year-on-year to ₦74.6 billion. Lending revenues are split 66-34% between the retail and SME business.

Speaker #1: Payments account for 13% of total revenues, while wealth accounts for 3.3%. We've seen strong growth of 62% year-on-year in the wealth business, from about ₦1.9 billion to ₦3.1 billion.

Speaker #1: Slide 29 shows the trend of our digital revenues has moved from 13.9 billion in Q2 2025 to 48.3 billion Q2 standalone quarter 2026, 35% year-on-year growth just looking at the two quarters digital contributes 12% of interest income, 14% of non-interest income.

Gbolahan Joshua: Digital contributes 12% of interest income, 14% of non-interest income. Slide 30 just shows the breakdown of our digital loans. Year on year has moved from 211 billion in Q2 2025 to 292 billion. Digital now contributes about 11.8% of the total loan book. The digital loan book is split 49/51% between the bank and our non-banking subsidiary, CDFC Limited. Slide 31 just shows highlights of the digital business. From a lending perspective, we disbursed about 144.7 billion to SMEs, about 9,500 loans. Average ticket size of 15 million. Portfolio size of 122.7 billion. For retail loans, about 124.5 billion disbursed, to about 949,000 customers. Average ticket size 58,000. Portfolio size is closer to 170 billion. For wealth, we now have 120,000 customers. Revenues are up 62% year on year. AUM has grown 46% to almost 47 billion.

Speaker #1: Slide 30 just shows the breakdown of our digital loans. Year-on-year, it has moved from ₦211 billion in Q2 2025 to ₦292 billion. Digital now contributes about 11.8% of the total loan book.

Speaker #1: The digital loan book is split 49% and 51% between the bank and our non-banking subsidiary, CDFC Limited. Slide 31 just shows highlights of the digital business from a lending perspective.

Speaker #1: We discussed about ₦144.7 billion to SMEs, about 9,500 loans, average ticket size of ₦15 million, portfolio size of ₦122.7 billion. For retail loans, about ₦124.5 billion disbursed to about 948,949 customers, average ticket size ₦58,000, portfolio size is closer to ₦170 billion. For wealth, we now have 120,000 customers, revenues are up 62% year-on-year, AUM has grown 46% to almost ₦47 billion.

Speaker #1: And then you see the breakdown of our digital payment revenues, largely driven by mobile—the mobile and the card business. Overall, when we look at digital, it's becoming a major revenue engine for the business. Thirteen percent of group earnings are growing; it's moving towards a ₦200 billion annual revenue business.

Gbolahan Joshua: You see the breakdown of our digital payment revenues, largely driven by the mobile and the card business. Overall, when we look at digital, it's becoming a major revenue engine for the business, 13% of group earnings and growing. It's moving towards a 200 billion annual revenue business. This year, we expect it to be north of 190 billion, and it's also helping us improve the economics of the group by lowering customer acquisition costs, supporting local deposit growth, improving our cost-to-income ratio, and helping us deepen product cross-selling. Thank you. I'll now hand over to Ladi.

Speaker #1: This year, we expect it to be not over ₦190 billion. And it's also helping us improve the economics of the group by lowering customer acquisition cost, supporting local deposit growth, improving our cost-to-income ratio, and helping us deepen product cross-selling.

Speaker #1: Thank you. I'll now hand over to Lydie.

Speaker #3: Thank you. The outlook for the second half of 2026 is very positive. We're seeing growth increasing at a compounding rate. Our margins are defensible, and the earnings are diversified.

Ladi Balogun: Thank you. The outlook for H2 2026 is very positive. We're seeing growth growing at a compounding rate. Our margins are defensible, and the earnings are diversified. There are a number of key things that we think are going to drive the H2 performance. The continued deployment of our recapitalization proceeds to support lending, in the higher return segments. It will be key. We expect at the very minimum, we would be at NGN 325 billion PBT guidance for this year, which would put us at around 25% return on equity using a slightly higher tax rate of 15% than we used in H1. This is in spite of the fact that there would have been significant impairments during the course of the year. We think the margins are defensible.

Speaker #3: There are a number of key things that we think are going to drive the H2 performance: the continued deployment of our recapitalization proceeds to support lending in the higher-return segments.

Speaker #3: It will be key. We expect that, at the very minimum, we would be at ₦325 billion PBT guidance for this year, which would put us at around a 25% return on equity, using a slightly higher tax rate of 15% than we used in H1.

Speaker #3: This is in spite of the fact that there would have been significant impairments during the course of the year. We think the margins are defensible.

Speaker #3: We think that the current levels are the floor at which we will see them, and we think there's a good chance that they will actually improve.

Ladi Balogun: We think that the current levels are the floor at which we'll see them, and we think there's a good chance that they'll actually improve subject to what happens in the money markets, in the H2 of the year. OpEx discipline will remain. Costs will grow at lower than inflation, in our view, powered by digital transformation and the rising contribution of both the wholesale business and other low cost-income ratio businesses. We expect cost-income ratio to be well below 45%. Earnings will remain diversified, with the non-banking subsidiaries growing at a fairly fast rate.

Speaker #3: Subject to what happens in the money markets in the second half of the year, OPEX discipline will remain. Costs will grow lower than inflation in our view.

Speaker #3: Powered by digital transformation, and the rising contribution of both the wholesale business and other low-cost, income-ratio businesses, we expect the cost-to-income ratio to be well below 45%.

Speaker #3: Earnings will remain diversified, with the non-banking subsidiaries growing at a fairly fast rate. Impairments, whilst elevated in 2026, will begin to ease. In the second half, combined with a sustainable cost-income ratio well below 45% and rapid growth in our revenues, diversified across banking, consumer finance, wealth, and investment banking, we think that we're well on track to attain a return on equity above 30% as we go into the year 2027.

Ladi Balogun: Impairments, whilst elevated in 2026, will begin to ease in the H2, combined with a sustainable cost-income ratio well below 45% and rapid growth in our revenues, diversified across banking, consumer finance, wealth, and investment banking, that we think that we are well on track to attain a return on equity above 30% as we go into the year 2027. Thank you. This brings us to the end of the presentation, and we're happy to take questions.

Speaker #3: Thank you. This brings us to the end of the presentation, and we're happy to take questions.

Speaker #2: Thank you, dear participants. As a reminder, if you wish to ask a question, please press star 11 on your telephone keypad and wait for your name to be announced.

Operator: Thank you, dear participants. As a reminder, if you wish to ask a question, please press star one one on your telephone keypad and wait for your name to be announced. To withdraw your question, please press star one and one again. Alternatively, you can submit your questions via the webcast. Please stand by while we compile the Q&A roster. This will take a few moments. Once again, if you would like to ask a question over the phone, please press star one one. Mr. Balogun, there are no audio questions at this moment. Please proceed with any written questions.

Speaker #2: To withdraw a question, please press star 1 and then 1 again. Alternatively, you can submit your questions via the webcast. Please stand by while we compile the Q&A roster.

Speaker #2: This will take a few moments. Once again, if you would like to ask a question over the phone, please press star 11. Mr. Balagundar, any audio questions at this moment?

Speaker #2: Please proceed with any written questions.

Ladi Balogun: Okay. I'll take the questions first of all from Feromi of KSFD, if I pronounced that correctly. What is the final dividend payout outlook for FY 2026? Maybe I'll hand over to our chief operating officer.

Speaker #3: Okay, so I'll take the questions, first of all, from Feromi—hope I pronounced that correctly. What is the final dividend payout outlook for FY 2026?

Speaker #3: Maybe I'll hand over to our Chief Operating Officer.

Speaker #1: Okay, thank you. Projected for this year is one naira per share, largely coming from expectations that the bank upstreams dividend after their Q3 audit.

Gbolahan Joshua: Okay, thank you. Projected for this year is 1 naira per share. Largely coming from expectations that the bank upstreams dividend after their Q3 audit. Credit Direct Limited also upstreams dividend, then a couple of the non-bank subsidiaries. Largely coming from the fact that the NPLs are now below 10%. At NPLs below 10%, the bank is allowed to upstream 30% of profit after tax, after statutory deductions to the holding company. That's what the projections are based on. Thank you.

Speaker #1: Credit Direct Limited also upstreams dividends, as do a couple of the non-bank subsidiaries. But largely, this is coming from the fact that the MPLs are now below 10%. With MPLs below 10%, the bank is allowed to upstream 30% of profit after tax, after statutory deductions, to the holding company.

Speaker #1: And so that's what the projections are based on. Thank you.

Speaker #3: The question is, what is the long-term incentive plan that the bank proposed for CBN approval? Sorry, do you want to take that?

Ladi Balogun: Question is, what is the long-term incentive plan that the bank proposed for CBN approval? Sorry, you want to take-

Speaker #1: Okay, so it's a plan to basically incentivize top performance in the group, starting with the senior management team and key talents within the group.

Gbolahan Joshua: Okay. It's a plan to basically incentivize top performers in the group, starting with the senior management team and key talent within the group. It will not involve an issuance of new shares, so there'll be no dilution to existing shareholders, but it's just a standard LT plan. I think we'll give more details when we get all regulatory approvals. Thank you.

Speaker #1: It will not involve an issuance of new shares, so there will be no dilution to existing shareholders. But it's just a standard LT plan.

Speaker #1: I think we'll give more details when we get all requisite regulatory approvals. Thank you.

Ladi Balogun: Third question was that we noted elevated write-off of over NGN 86 billion of the books of the bank at the H1 2026. What is the level of write-off we are still expecting for the rest of the year 2026?

Speaker #3: The third question was that we noted an elevated write-off of over ₦86 billion on the books of the bank as of H1 2026. What is the level of write-off we are still expecting for the rest of the year 2026?

Speaker #1: Okay. For the full-year call, we had guided that to get the NPLs of the bank below the regulatory threshold, we might have had to take additional impairments and write-offs to the tune of about ₦250 billion.

Gbolahan Joshua: Okay. For the full year call, we had guided that to get the NPLs of the bank below the regulatory thresholds, we might have had to take additional impairments and write-offs to the tune of about NGN 250 billion. What we've seen in H1 is between a combination of the write-offs, the pay-downs we've seen, and the restructured loans, we don't expect to have any further significant write-offs. However, there will still be some level of impairment in H2, taking total impairments for the year, not of 6%, just at about 6% cost of risk. No further significant write-offs, but there will still be some level of impairment, which we've modeled into the numbers to give us the PBT figure of NGN 325 billion. Thank you.

Speaker #1: And what we've seen in H1 is, between a combination of the write-offs, the paydowns we've seen, and the restructured loans, we don't expect to have any further significant write-offs.

Speaker #1: However, there will still be some level of impairment in H2, taking total impairments for the year to not 6%, just at about 6% cost of risk.

Speaker #1: So, no further significant write-offs, but there will still be some level of impairment, which would be modeled into the numbers to give us the PBT figure of ₦322 billion.

Speaker #1: Like 325 billion. Thank you.

Speaker #3: Okay. The fourth question PENCOM in the recent circular permitted the pension arm of the hold code to invest in her parent company. Is the bank going to take this up take this opportunity take up this opportunity?

Ladi Balogun: Okay. The fourth question. PENCOM in the recent circular permitted the pension arm of the holdco to invest in her parent company. Is the bank going to take up this opportunity? Maybe I'll announce that.

Speaker #3: Do we have an answer to that?

Gbolahan Joshua: Is the bank going to take up the terms of investing? Bank is not listed yet, so it is holding company.

Speaker #1: Is the bank going to take up the returns and invest? The bank is not listed yet, so it's a holding company.

Ladi Balogun: No. We'll have to get back to you on that question, if you don't mind.

Speaker #3: No, we'll have to get back to you on that question, if you don't mind.

Speaker #1: Yeah, yeah. Just to get some more clarity.

Gbolahan Joshua: Okay. Yeah.

Speaker #3: Yeah. Okay.

Ladi Balogun: Yeah.

Gbolahan Joshua: Just to give it more clarity. Okay.

Speaker #1: Okay.

Ladi Balogun: Yeah. From Mayowa Bolade. Question pertains to significant migration in energy and power sector stage 3 loans. Can we share more details on this exposure?

Speaker #3: Yeah. So, from my OR, Baladi, the question pertains to significant migration in the energy and power sector stage three loans. Can we share more details on this exposure?

Speaker #1: Okay. We can't share—we can't speak about the particular exposure. But if you looked at the full-year and Q1 investor presentations, we had basically highlighted the loans that were in Stage Two, and the various sectors they were in.

Gbolahan Joshua: Okay. We can't speak about the particular exposure. If you looked at our full year and Q1 investor presentation, we had basically highlighted the loans that were in stage 2 and the various sectors they were in. For one of the exposures, we've moved it from stage 2 to stage 3, and that's why when you look at the NPL, you find out that the power sector is about 50% of the stage 3 loan book. Thank you.

Speaker #1: So, for one of the exposures, we've moved it from Stage 2 to Stage 3, and that's why, when you look at the MPL, you'll find that the power sector is about 50% of the Stage 3 loan book.

Speaker #1: Thank you.

Speaker #3: Thank you. Any update on our Pan African expansion? No update as of now. We are still actively involved in working on some opportunities in the West African region.

Ladi Balogun: Thank you. Any update on our Pan-African expansion? No update as of now. We are still actively involved in working on some opportunities in the West African region. No conclusive updates as of now. What is our assessment of the CBN proposal to have holdcos raise capital, and how will it affect you? At this point, it is still a proposal. In fact, an exposure draft. There have been significant feedback given to the Central Bank, particularly the fact that seeking a 20% buffer against the minimum capital requirements of all operating companies at the paid-up capital and, what do you call it? Share premium account. Would result in some debt capital that we would not typically generate strong ROE from. We think this is being taken under consideration by the Central Bank.

Speaker #3: But no conclusive updates as of now. Then, what is our assessment of the CBM proposal to have HoldCos raise capital? And how will it affect you?

Speaker #3: At this point, it's still a proposal—in fact, an exposure draft. There has been significant feedback given to the central bank, particularly regarding the requirement to maintain a 20% buffer above the minimum capital requirements for all operating companies at the paid-up capital. And what do you call it?

Speaker #3: Share premium account would result in some dead capital that we would not typically generate strong ROE from. We think this has been taken under consideration by the Central Bank.

Speaker #3: We think also the final position would also give time for banks to comply. If indeed they stick with this at this stage, we therefore cannot mean in terms of capital that may need to be raised.

Ladi Balogun: We think also the final position would also give time for banks to comply, if indeed they stick with this. At this stage, we therefore cannot say what this will mean in terms of capital that may need to be raised. We do not think that this will materially affect our ROE projections. We are fairly confident that irrespective of the outcome, we will be well above 30% ROE next year, and we intend to be pushing towards the mid-30s by 2028. Next question is, how does FCMB view the regulation on holding companies and closed dealing entities? I am trying to think what that is meant to be. Closed dealing entities, right? Assuming the guidelines go into effect as they are, what is the impact on FCMB? Would FCMB need to raise additional capital or undertake some restructuring with a downgrade to a national license? How are we thinking about this?

Speaker #3: But we do not think that this will materially affect our ROE projections. We are fairly confident that, irrespective of the outcome, we'll be well above 30% ROE next year.

Speaker #3: And we intend to be pushing towards the mid-30s by 2028. Next question is: How does FCMB view the regulation on holding companies and closely linked entities?

Ladi Balogun: Next question is, how does FCMB view the regulation on holding companies and closed dealing entities? I am trying to think what that is meant to be. Closed dealing entities, right? Assuming the guidelines go into effect as they are, what is the impact on FCMB? Would FCMB need to raise additional capital or undertake some restructuring with a downgrade to a national license? How are we thinking about this?

Speaker #3: I'm trying to think what that's meant to be—closely linked entities, right? Yeah. Assuming the guidelines go into effect as they are, what is the impact on FCMB?

Speaker #3: Would FCMB need to raise additional capital or undertake some restructuring with a downgrade to a national license? How are we thinking about this? I think, as mentioned, it's still an exposure draft.

Ladi Balogun: I think as mentioned, it is still an exposure draft. We are exploring a variety of scenarios. You are right that if one of the options goes ahead, the Nigerian bank would be a national bank and would not need the same NGN 500 billion level of capital. Either our international subsidiaries would either be held directly by the holding company or through an intermediate holding company. We would have to wait for guidance as to how that capital could be transferred to determine whether or not we would need additional capital. As of now, it is a very fluid situation, and we are waiting for clarity. We really do not think that this will materially impact the trajectory of the business from an ROE perspective. We just wait for further guidance from the Central Bank.

Speaker #3: We are exploring a variety of scenarios. You're right that if one of the options goes ahead, the Nigerian bank would be a national bank and would not need the same ₦500 billion level of capital.

Speaker #3: And either our international subsidiaries would be held directly by the holding company or through an intermediate holding company. And so, we would have to wait for guidance as to how that capital could be transferred to determine whether or not we would need additional capital.

Speaker #3: But as of now, it's a very fluid situation, and we're waiting for clarity. We really do not think that this will materially impact the trajectory of the business from an ROE perspective.

Speaker #3: And so we just wait for further guidance from the Central Bank. We do expect that there will be continued consultation, and something will be arrived at, we believe, that will ensure that Nigeria, and the Nigerian banking and financial services industry, remains a competitive sector to invest in.

Ladi Balogun: We do expect that there will be continued consultation, and something will be arrived at, we believe, that will ensure that Nigeria and the Nigerian banking and financial service industry remains a competitive sector to invest in. What is our dividend payout policy currently, and should we expect any changes going forward? We typically try to pay in the range of 25% of our earnings after tax. We were not able to do that last year because of the last minute reclassification or 11th-hour reclassification of a couple of loans, which took the bank's NPL ratio on an NGAAP basis above the threshold. Those situations have been cured, so we expect that payout ratio should be back at those levels. Next question is, as at H1 2026, what proportion of the loan book is classified as Stage 2 loans?

Speaker #3: So, what is our dividend policy currently? And should we expect any changes going forward? We typically try to pay in the range of 25% of our earnings after tax.

Speaker #3: We weren't able to do that last year because of the last-minute reclassification, or 11th-hour reclassification, of a couple of loans, which took the bank's NPL ratio on an end-gap basis above the threshold.

Speaker #3: Those situations have been cured, so we expect that the payout ratio should be back at those levels. Next question is, as at H1 2026, what proportion of the loan book is classified as Stage Two loans?

Ladi Balogun: Additionally, what is the likelihood of migration from Stage 2 to Stage 3 by the end of the year based on current portfolio performance? Don't know who wants to take that.

Speaker #3: Additionally, what is the likelihood of migration from Stage Two to Stage Three by the end of the year based on current portfolio performance? Does anyone want to take that?

Speaker #3: Should we?

Gbolahan Joshua: We can get back to what is classified as Stage 2. We know what is Stage 3, but we can get back to on Stage 2 just to be double sure.

Speaker #1: We can get back to what is classified as Stage Two. We know what is Stage Three, but we can get back to our Stage Two just to be double sure.

Speaker #3: Okay, so we'll get back to you on that question, if you wouldn't mind. We know what is classified as Stage 3, which is how much?

Ladi Balogun: Okay. We'll get back to you on that question, if you wouldn't mind. We know what is classified as Stage 3, which is how much?

Speaker #1: I think actually it's about 100. And did you get the figure for stage? But we don't expect there to be significant migration. What we've seen in H1 is actually we've seen migration from stage two to stage three, which was largely what accounted for the growth in the power sector IFRS stage three loan book.

Gbolahan Joshua: Actually, We can give you the figure for Stage. We don't expect there to be significant migration. What we've seen in H1 is actually we've seen migration from Stage 2 to Stage 3, which was largely what accounted for the growth in the power sector IFRS Stage 3 loan book.

Speaker #3: Okay, I think that's it. Then, no more questions. On the portal, I don't know if there's anything else from voice questions.

Ladi Balogun: Okay. I think that's it. There are no more questions on the portal. I don't know if there's anything else from voice questions.

Operator: Yes, Peter, no audio questions.

Speaker #2: There are no audio questions from the speakers.

Speaker #3: Okay, thank you very much. We look forward to catching up with everyone again at the end of Q3. Thank you.

Ladi Balogun: Okay. Thank you very much. We look forward to catching up with everyone again at the end of Q3. Thank you.

Operator: This concludes today's conference call. Thank you for participating. You may now all disconnect. Have a nice day.

Q2 2026 FCMB Group Plc Earnings Call

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