FCMB Group Plc (FCMB) has reported a profit before tax (PBT) of N2.6 billion for the first nine months through September 2015 even as money set aside for defaulted loans or credit significantly took a toll on the bottom line.
Gross earnings or revenues increased by 2 percent to N109.30 billion as the lender grappled with macroeconomic headwinds affecting banks in Africa’s largest oil producer.
FCMB Group Plc, the financial holding company, comprises of First City Monument Bank Limited, FCMB Capital Markets Limited, CSL Stockbrokers Limited and CSL Trustees Limited.
Going by the unaudited International Financial Reporting Standards (IFRS) – compliant Group results, which include the Bank’s audited results for the same period, FCMB’s net interest income for the period ended September 2014 stood at N48.7 billion, as against N49.1 billion for the same period prior year.
Operating expenses was up 3 percent Year-on-Year (YoY) to N50.5 billion, for the nine-months ended September 2015, compared to N48.9 billion forthe same period the previous year- a slower growth rate than inflation rate, underscoring FCMB’s successful cost saving initiatives.
Total assets was up 12 percent YoY to N1.17 trillion as at September 2015 compared to N1.04 trillionas at September 2014, but flat Year-to-Date.
First City Monument Bank Limited, the commercial and retail banking subsidiary of FCMB Group Plc, continued to validate its leading position as a helpful and inclusive lender by increasing loans and advances to customers to N568.0 billion as at September 2015, as against N565.0 billion the previous year.
Peter Obaseki, Managing Director of FCMB Group Plc, said: “The Group’s nine months’ profit before tax dropped YoY to N2.6 billion, with the significant earnings drop largely coming from our commercial banking activities. This was caused by a specific impairment of N5.4 billion on a contracted receivable with a reputable and creditworthy going concern, that we are hopeful of recovering and additional impairments of N6 billion on our loan book. Revenue also came under significant pressure due to various regulatory and macroeconomic headwinds, with the lull in the capital markets also adversely affecting equity capital transactions and other businesses under our investment banking arm. However, top-line revenue continues to hold up on the back of a strong and resilient retail business, transaction services and alternate channel offerings; improving liquidity and stable capital adequacy.
The significant drop in FCMB profit was a result of a 291 percent rise in loan loss expenses to N15.28 billion in September 2015 as against N3.91 billion the previous year.
The bank’s NPLs increased to 5.8 percent in 2015, from 3.60 as at December 2014.
FCMB exposure to upstream oil and gas was 6 percent in the third quarter of 2015, this figures is lower than the 8 percent, 7 percent, 9 percent, 9 percent, 8 percent, exposure to the upstream recorded by First Bank Holdings, Skye, GTBank, Diamond, and Access Bank, according to a January 22 note by Renaissance Capital, a Lagos investment house.
Further analysis of FCMB’s financial statement showed interest income increased by 3 percent to N87.40 billion in the period under review as against N84.50 billion in 2014. Net interest income was down by 1 percent to N48.71 billion in 2015 as against N49.10 billion in 2014.
The bank’s loans to deposit ratio increased to 80.80 percent in 2015 from 78.20 percent in 2014. Loans and advances reduced by 8 percent to N568.50 billion in 2015 from N617.97 billion in 2014.Deposit to customers also dipped by 4 percent to N703.22 billion in 2015 compared with N733.80 billion in 2014.
BALA AUGIE
