FCMB announces N16.3b PBT in half-year 

FCMB Group Plc has announced a profit before tax (PBT) of N16.3 billion for the six-months ended 30 June 2016.This represents an increase of 70 per cent from N9.6 billion recorded in the corresponding period in 2015.

The bank partly attributed the performance to foreign exchange revaluation gains, following the recent implementation of the flexible exchange rate policy by the Central Bank of Nigeria (CBN). Gross revenue increased by 14 per cent to N88.3 billion, compared to N77.4 billion achieved during the same period in the previous year.

Further review of the bank’s performance showed that non-interest income surged by 110 per cent to N26.0 billion versus N12.4 billion recorded at the end of June 2015. Customer confidence in FCMB remained strong, as deposits were up five per cent to N689.4 billion in June 2016, compared to N657.2 billion at the end of the first quarter of 2016 (Q1 2016).

Total assets increased by 13 per cent to N1.3 trillion in June 2016.  The group’s loans and advances, also grew by 17% QoQ to N657.0 billion in June 2016, compared to N561.6 billion at the end of Q1 2016.

However, the bank recorded three per cent decline in operating expenses by  to N32.7 billion. Non-Performing Loans (NPLs) to total loans ratio was marginally down to 4.7 per cent from 4.8 per cent achieved in Q1 2016.    Earnings per share recorded a significant increase from 33 kobo at the end of the first quarter 2016 to 283 kobo as at 30 June 2016.

The Managing Director of the bank, Peter Obaseki attributed the 70 per cent rise in profit before tax to 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.”

He explained that 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, Ladi Balogun noted that the bank witnessed improved performance in spite of the challenges faced by the economy and banking sector.

The most significant driver of earnings growth for the bank, according to him, was the N9.1 billion exchange gains from the dollar balance sheet.“ In addition, our personal and SME banking segments have exhibited resilient profit growth (in excess of 442 per cent or N7.4billion, year on year, driven by electronic banking revenue and strong customer acquisition, now at 60,000 a month.

“We expect that loan impairments will remain elevated in the second half of the year but will be cushioned by continued momentum in revenues and efficiency gains from cost optimisation measures taken earlier in the year,” he added.