FCMB Group Plc has assured investors that it will continue to provide superior performance that would add significant value in a sustainable manner in spite of the challenging macroeconomic and regulatory environments.
The company also said that its subsidiaries are well positioned to deliver more cuttingedge solutions that would provide the best customer experience in their respective target markets.
The Company gave this assurance in Lagos at the 5th Annual General Meeting (AGM) of FCMB Group Plc, comprising eight entities, namely First City Monument Bank Limited, FCMB Capital Markets, CSL Stockbrokers Limited, CSL Trustees Limited, Legacy Pension Managers Limited, FCMB (UK) Limited, First City Asset Management Limited and Credit Direct Limited, Going by its audited accounts for the year ended December 31, 2017, FCMB Group Plc recorded a gross revenue of N169.9 billion against N176.351 billion reported in the preceding year. Profit after tax stood at N9.4 billion, showing 34 per cent decline from N14.3 billion achieved in 2016 while profit before tax dropped from N16.251 billion to N11.462 billion.
The deposits grew to N689.9 billion as at the end of December 2017, an increase of 5 per cent, from N657.6 billion in the previous year. Total non performing lo
ans and advances went up to N33.221 billion from N25.474 billion reported in the preceding year. The Group’s capital adequacy ratio also improved to 16.9 per cent from 16.7 per cent, just as asset base increased to N1.19 trillion, compared to N1.17 trillion at the end of 2016. Presenting the Chairman’s report, Mr. Oladipupo Jadesimi said: “We will continue to shore up the capital of the bank through profit retention in preparation for the growth opportunities that we expect as the economy recovers’’.
The Chairman also said that the bank saw a few headwinds to profitability in 2017, stressing that a high interest rate environment led to a ride in the bank’s funding cost.
He said that the deposits declined due to customer migration to relatively high yield treasury bills and government bonds. Despite the reduction in deposits, he said the bank saw an increase in cash reserve requirement which impacted liquidity and the bank’s earning capacity.
He said that the bank continued to take a coutious approach towards lending in 2017 and consequently loans reduced marginally as net loans and advances went down by 15 per cent during the year.
The Chairman of the Board of FCMB Group expressed gratitude to shareholders for their continuous support, adding that: ‘’Although we met with a number of challenges as a Group in 2017, I am pleased to say that we were able to surmount them, thanks to the commitment of all the personnel of our Group companies’’.
Also speaking at the AGM, the Group Chief Executive Officer of FCMB Group Plc, Mr. Ladi Balogun, said ‘’In spite of the reduction in headline numbers, Group performance is an improvement over the previous year after adjusting for the significant (foreign exchange) (Forex) revaluation income enjoyed in 2016. The key drivers of the Group’s performance include increase in income from our non-banking activities, lower impairment charges from the bank and its subsidiaries, and improved operating efficiencies through more pervasive use of technology’’.
Balogun said that FCMB Group Plc’s successful acquisition of majority 88.2 per cent stake in Legacy Pension Managers Limited, will go a long way to help achieve further diversification of service offerings and consequent earnings within the FCMB Group. According to him, “ We see significant growth opportunities in the Pension management industry in Nigeria as it is yet to achieve maturity and will support and facilitate strategic organic and inorganic growth initiatives that will position Legacy in the toptier of its industry over the next few years’’.
Concerning the performance of the flagship of the holding institution, First City Monument Bank Limited, the Commercial and Retail Banking member of FCMB Group Plc, the Group Chief Executive told the shareholders to ‘’showed signs of improvement with growth in income levels (after adjusting for exceptional forex revaluation income in 2016), reduction in impairment charges and substantial growth in our UK business and consumer finance business (CDL), after a difficult 2016. Commercial and Retail Banking remains our largest group, contributing 76.2 per cent of profits and 98.5 per cent of total assets’’.
In addition, he stated that the Investment Banking arm: ‘’Exhibited improved performance, from a loss position in 2016 of N84.0million after tax to a profit position of N430.3million after tax in 2017, largely driven by CSL Stockbrokers Limited. Our stockbroking business remains a top-3 player in its sector and participated as the sell-side broker on the largest ever trade on the Nigeria Stock Exchange in December 2017. CSLS Stockbrokers Limited and FCMB Capital Markets Limited jointly accounted for 4.1 per cent of profits’’.
Shareholders of First City Monument Bank at the meeting approved total dividend appropriation of N1.98 billion for the financial year, translating into a dividend of N0.10 kobo per share held by investors. The President of Progressive Shareholders Association of Nigeria, Mr Boniface Okezie commended the board and management team of the FCMB group for the sustaining dividend policy despite the harsh operating environment being witnessed in the economy.
He also cautioned that the the recent circular released by the Central Bank of Nigeria may be difficult for the nation’s banks to operate and make profit in future. He congratulated the board for the various awards received during the year, adding that the awards shows that people are happy with the bank and entire company
