FCMB Group Q1 Profit rises 137% on strong interest income growth

FCMB Group Plc has disclosed that its profit after tax rose 137 percent to N76.53 billion in the first quarter, driven by higher interest income, lower funding costs, and a successful capital raise that strengthened its balance sheet.

According to the holding company’s first-quarter interim report for 2026, its gross earnings rose to N320.22 billion, up from N252.70 billion in the corresponding period of 2025, representing a 26.7 percent increase.

The growth was primarily driven by a sharp rise in interest and discount income, which increased by 33.5 percent to N286.14 billion from N214.36 billion a year earlier.

A major highlight of the quarter was FCMB’s ability to expand earnings despite a challenging operating environment.

Interest expense fell by 7.2 percent to N117.79 billion, compared with N126.87 billion in Q1 2025. The decline in funding costs combined with stronger asset yields pushed net interest income to N168.35 billion, nearly double the N87.50 billion reported a year earlier.

Non-interest income also contributed positively. Net fee and commission income increased 30.3 percent to N24.47 billion, reflecting stronger transaction banking activities and digital banking volumes. Fee and commission expenses declined significantly from N5.51 billion to N3.40 billion, helping boost margins.

However, trading operations faced headwinds. The group recorded a net trading loss of N3.42 billion, compared with a gain of N14.34 billion in Q1 2025. In addition, other losses rose sharply to N12.99 billion, largely reflecting foreign exchange-related valuation impacts. The cash flow statement showed unrealised foreign exchange losses of N13.04 billion, indicating currency volatility remained a key challenge.

Despite these pressures, FCMB generated other income of N9.64 billion, significantly higher than the N140 million recorded in the prior year.

Operating expenses continued to rise amid inflationary pressures.

Personnel expenses increased 21.3 percent to N27.59 billion, while general and administrative expenses rose to N32.36 billion from N29.48 billion. Other operating expenses also grew to N21.97 billion.

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The group’s credit impairment charges increased by 29.3 percent to N12.31 billion, suggesting continued prudence in provisioning against potential credit losses. Nevertheless, earnings growth comfortably absorbed the higher provisions.

As a result, operating profit surged to N86.85 billion, up from N35.25 billion in Q1 2025. Profit before tax rose 148.4 percent to N86.99 billion. After accounting for an N8.47 billion minimum tax charge and N1.99 billion income tax expense, profit after tax settled at N76.53 billion.

FCMB’s balance sheet expanded by 4.4 percent during the quarter, with total assets increasing to N7.96 trillion from N7.63 trillion at the end of December 2025.
The growth was driven largely by liquidity accumulation and investment portfolio expansion.

Cash and cash equivalents rose by 39.4 percent to N1.81 trillion, while investment securities increased by 6.6 percent to N2.17 trillion. Restricted reserve deposits with the Central Bank of Nigeria also edged higher to N1.20 trillion.

In contrast, loans and advances to customers declined by 4.6 percent to N2.26 trillion from N2.37 trillion, suggesting the group adopted a more conservative lending stance or experienced significant repayments during the quarter.

On the liability side, customer deposits remained the primary funding source, rising 5.8 percent to N4.68 trillion from N4.42 trillion. This growth helped offset a 21.2 percent decline in deposits from banks, which fell to N796.62 billion.

Borrowings increased sharply to N634.02 billion from N365.57 billion, reflecting additional long-term funding raised during the quarter. Meanwhile, debt securities issued dropped significantly to N44.20 billion from N121.58 billion, indicating repayments and liability restructuring.
One of the most significant developments during the quarter was FCMB’s successful capital raising exercise.

Share capital increased from N21.39 billion to N32.98 billion, while share premium jumped to N479.37 billion from N267.57 billion. Together, these additions contributed more than N223 billion in fresh equity.

Consequently, total shareholders’ funds rose by 36.5 percent to N1.14 trillion, compared with N836.41 billion at year-end 2025. Retained earnings also climbed to N299.87 billion from N223.51 billion, reflecting the strong profitability achieved during the quarter.

The stronger capital base positions the group favourably ahead of regulatory capital requirements and future growth opportunities.

FCMB’s cash generation remained robust despite a lower operating cash flow relative to the previous year.

Net cash generated from operating activities stood at N483.73 billion, supported by higher customer deposits, reductions in trading assets, and strong interest receipts. The group received N263.37 billion in interest income during the period.

Investing activities consumed N110.36 billion, mainly due to the acquisition of investment securities worth N266.50 billion and continued investment in technology and intangible assets.

Financing activities generated N212.61 billion, largely driven by the N223.38 billion proceeds from the issue of shares and additional long-term borrowings.

Overall, net cash and cash equivalents increased by N585.97 billion during the quarter. Even after absorbing a N74.19 billion adverse foreign exchange translation impact, cash and cash equivalents closed at N1.81 trillion, underscoring the group’s strong liquidity position.

As of June 8, the holding company’s shares stood at N12 and have lost over 0.4 percent off its price valuation, ranking it 116th on the NGX in terms of year-to-date performance.

FCMB currently have a market capitalisation of N739 billion.