• Wednesday, February 21, 2024
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FCMB Group nets N9.6bn profit in 6 months


First City Monument Bank (FCMB) Group plc has reported increased revenue earning of 11 percent Year-on-Year (YoY) to N77.4 billion for the first six months of the year, with a pre-tax profit of N9.6 billion.

The period also saw increased business momentum, with total assets growing 15 percent YoY to N1.22 trillion and up 5 percent Year-to- Date (YTD).

Customer’s confidence in the bank remained strong, as deposits grew 4 percent during the period to N785.8 billion, just as its diversification across commercial and investment banking, and wealth management, provided some cushion as earnings from non-banking activities proved more resilient.

FCMB Limited, the retail banking subsidiary of FCMB Group, continued to validate its increased drive into retail contributing 21 percent (N1.7bn) of FCMB Limited’s profit before tax. The retail group also grew deposits 21 percent YoY to N431.2 billion, or 54 percent of total deposits.

The bank continued its drive of inclusive lending, granting over 9,100 new loans to SMEs, even as its credit card offering saw increased patronage, with over 17,000 cards issued in half of this year.

Corporate banking activities were however constrained by scarcity of foreign exchange and tight monetary policy, which affected trade finance, foreign exchange trading and lending activities.

In the first half of 2015, the bank’s UK wholesale banking subsidiary, FCMB Bank (UK) Limited, broke even after 14 months of operations as a deposit-taking institution.

Peter Obaseki, managing director of FCMB Group, acknowledged that, ‘’the economy has entered a higher risk level with inflation climbing to 9.2 percent, fiscal and trade deficits. Declining GDP growth rate below 4 percent as at Q1 2015 from 5.94 percent as at Q4 2014; broad money supply (MM2) contracted by N380 billion in June, from N19.19 trillion in May, to N18.81 trillion.

“The Group results for H1 2015 reflect a deliberate conservative stance aimed at maintaining robust capital buffers in the face of a tough macro-economic and regulatory environment.”

Ladi Balogun, GMD/CEO, FCMB Limited, said the “H1 2015 was characterised by significant macro-economic and policy headwinds,” saying that limited supply of foreign exchange had a major impact on the commercial and retail banking group’s (CRBG) trade finance and foreign exchange trading income.

According to him, “the harmonisation of the cash reserve requirement to 31 percent led to a significant rise in our restricted reserves and consequently constrained lending and put pressure on net interest margins.

“Asset quality was adversely affected by the effect of declining government revenue on contractors and employees, which saw our NPL ratio climb to 5.2 percent compared to 3.6 percent at the end of FY14.  In spite of the inflationary pressures, operating expenses saw a modest rise of five percent in the CRBG, thanks to our ongoing channel optimisation programme.’’