FCMB records N16.3bn profit in 2Q

FCMB records N16.3bn profit in 2Q growth at the end of second quarter financial year ended 30 June 2016 as  profit before tax (PBT) increased to  N16.3 billion for the six-months. This represents an increase of 70 per cent from N9.6 billion reported  in the comparative period of 2015. FCMB Group Plc  which consists of First City Monument Bank (FCMB) Limited, FCMB Capital Markets Limited, CSL Stockbrokers Limited and CSL Trustees Limited – partly attributed the development to foreign exchange revaluation gains, following  the recent implementation of the flexible exchange rate policy by the Central Bank of Nigeria (CBN).

FCMB Group Plc’s half year  results also showed a decline in operating expenses by three per cent Year-on-Year (YoY) to N32.7 billion, in spite of a rise in inflation, while Non-Performing Loans (NPLs) to total Loans Ratio was marginally down to 4.7 per cent from 4.8 per cent for first quarter  2016. Earnings per share witnessed a significant increase from 33kobo at the end of the first quarter 2016 to 283 kobo as at 30 June 2016.

Commenting on the results, the Managing Director of FCMB Group Plc, Mr. Peter Obaseki, said: “Our group’s half year 2016 profit before tax came in at N16.3 billion, up 70 per cent  on same period in 2015 and driven largely by treasury upsides, cost optimisation and sustained momentum in the commercial and retail banking group.
In the second quarter, revaluation gains on realised foreign currency investments, at group-level, translated to slightly over N2 billion in revenue. The investment banking business continued to face challenges arising from the sustained lull in both equity and debt capital markets while the wealth management businesses showed consistency and resilience over the last two quarters.

Key prudential and soundness ratios, including liquidity ratio of 35.9 per cent  and capital adequacy of 16.1 per cent  continue to hold-up; we expect capital to strengthen through internal capitalisation of profits in due course and other measures in line with our capital plan.
We see more headwinds in the second half of the year, as we enter a high inflation and interest rate environment with implications for consumers and borrowers; our overall stance will therefore be conservative while we drive up execution in the low-risk segments of the portfolio.”

The Group Managing Director of FCMB Limited, Mr Ladi Balogun also commented on the results, stating “The bank witnessed improved operating performance in spite of the multiple challenges faced by the economy and banking sector. The most significant driver of earnings growth was the N9.1billion exchange gains from our dollar balance sheet. In addition our personal and SME banking segments have exhibited resilient profit growth (in excess of 442 per cent or N7.4 billion, year on year) driven by electronic banking revenue and strong customer acquisition, now at 60,000 a month.