FCMB records 453% increase in profit in Q3

FCMB Group Plc has reported a profit before tax (PBT) of N14.2 billion for the nine-months, ended 30 September 2016. This represents an impressive increase by 453 per cent from N2.563 billion recorded in the comparative period of 2015.

FCMB Group Plc, the holding firm with subsidiaries including First City Monument Bank (FCMB) Limited, FCMB Capital Markets Limited, CSL Stockbrokers Limited and CSL Trustees Limited, has attributed the current development partially to its soundness of ratios, steady buffers against the subsisting adverse operating environment, in addition to the Bank’s sustained revenue momentum combined with its cost optimisation programme.

From the details of its unaudited results announced on the floor of the Nigerian Stock Exchange (NSE), FCMB Group Plc’s gross revenue was N140.7 billion for the nine-months, a 29 per cent increase from N109.3 billion for the same period prior year.

The group also recorded non-interest income of N44.8 billion which is an increase of 128 per cent Year-on-Year (YoY), from N19.6 billion for the same period prior year. This increase has been predicated on a 612 per cent YoY increase in FX income, from N5.0 billion for the nine-months ended September 2015, to N35.3 billion for the nine-months ended September 2016.

The Managing Director of FCMB Group Plc, Mr Peter Obaseki, commenting said, “the audited nine months results for the period ended September 2016, reflects our focus on key soundness ratios and the need to maintain buffers against a sustained adverse operating environment.

“Accordingly, capital adequacy and liquidity ratios have held up at 17.6 per cent and 36.8 per cent, respectively. Overall, profit before tax came in at N14.2 billion, a 453 per cent growth, translating to an EPS of 87 kobo, up 30.6 per cent, YoY.

“Underlying revenue momentum remains strong while cost optimization programme led to a two per cent YoY drop in operating expenses, despite inflationary spiral respectively. The macro economic conditions in the final quarter remains challenging; we will keep up a conservative stance,” he said.

Mr Ladi Balogun, Group Managing Director of FCMB Ltd, while also commenting on the Group’s results stated that, “The audited results of the bank reveal that the extraordinary performance of Q2 2016 offset the loss recorded in Q3 of N2.4 billion, thereby resulting in strong year-on-year profit growth of 913 per cent. In order to avoid an unsustainable, non-cash, spike in earnings from further revaluation gains in Q3, the bank also significantly stepped up its loan loss provisions. The macroeconomic climate is taking a significant toll on the bank’s borrowing customers across all segments.

“Accordingly, the bank will maintain high provision coverage ratios (currently 131 per cent); continue to strengthen our capital adequacy ratio (currently 16.9 per cent) and our liquidity ratio (currently 36.8 per cent).”

The Chief Executive Officer also said, “While our prudential ratios should continue to strengthen into Q4 (modestly buoyed by a tier-two-capital injection of N7.5bn in November), we do not anticipate improvement in the fourth quarter earnings. Nonetheless, we are pleased with the gains we continue to record in growing our business in areas such as retail banking (with a 315 per cent YoY growth in profitability) and increasing our share of banking activities in the agricultural sector. In spite of the fact that we have seen several revenue lines diminish due to external factors – as we build a more resilient balance sheet, we will be well positioned for a strong rebound in core earnings in the medium term.”

FCMB expects to continue to distinguish itself by delivering exceptional services, while enhancing the growth and achievement of the personal and business aspirations of its customers and all stakeholders.