GROUP Managing Director, First City Monument Bank Plc, Mr. Peter Obaseki yesterday said the bank has recorded positive developments in most of its key operating areas.
He said this at its fact behind the figure on the Nigerian Stock Exchange.
According to him, the net revenue rose as a result of “growth in earning assets, improved funding cost and the growing contribution of retail banking activities which compensated for the decline in unit commissions on turnover.”
FCMB group declared a 15 per cent rise in Profit Before Tax, PBT for the first quarter ended March 31, 2014.
The group’s unaudited accounts for the period, PBT rose to N5.6 billion from N4.8 billion in the same period of 2013. The group net revenue also grew by 16 per cent to N22.3 billion.
In the three-months period ended March 31, 2014, the group said its deposits rose by nine per cent year-on-year to N687 billion due to a 22 per cent growth in current and savings accounts.
Its fixed deposits, however, declined, while loans and advances grew 50 per cent year-on-year to N493.7 billion. The bank added, “It is also noteworthy that the investment banking group’s contribution to the group’s pre-tax profits increased in Q1, 2014. FCMB Capital Markets Limited and CSL Stockbrokers reported pre-tax profits of N198 million, 128 per cent higher than the same period in 2013.”
FCMB reported gross income of N63.3 billion for the six-month period to June 2013, an increase of 17.4 percent year-on-year, from N53.9 billion in the same period of 2012. The bank reported profit before tax of N10.6 billion for half year 2013 and N5.8 billion for the second quarter of 2013, up 36.5 percent year on year N7.8 billion in 2012 and 20 percent quarter on quarter (N4.8 billion) respectively.
FCMB recorded an impressive bargain tendency to end the session with maximum gain of +9.8% as market halts 2days price correction. The stock hits a new high to close at N3.37 on growing demand, extending a 4-months gaining streak.
This indicates growing positive sentiments towards the stock, from both investors and the shareholders – an indication of improved investors’ loyalty, driven by improved key fundamentals of the bank.
According to Mr. Ladi Balogun, Group Managing Director/ CEO of FCMB Ltd,
“Our commercial and retail banking activities continue to be the key driver of group performance, with 26% growth in profit before tax. Specifically, the growth in our retail banking activities enabled us to not only attain industry leading margins but also deliver 37% loan growth. Furthermore, marketing and service excellence enabled us acquire 500,000 new retail customers in 2014. Our modest deposit growth of 3% overall was attributable to a switch in our wholesale funding mix at the margin from deposits to stable long term borrowings. We successfully closed a N26 billion Tier 2 bond issue at a fixed rate of 14.25% for 7 years and further grew bilateral and syndicated borrowings by N40 billion.
The strong rally in earnings in the fourth quarter of 2014, coinciding with a significant fall in oil prices and government revenue, prompted us to take the prudent and pre-emptive measure of growing our loan loss provisions. An annual cost of risk of 1.8% (up from 1.4% in 2013) was recorded and this led to a non-performing loan ratio of 3.6% (2013: 3.9%). In spite of the significant loan growth, our capital adequacy ratio was enhanced in Q4 2014 to 19% as a result of the N26 billion Tier 2 Capital raise.
This puts us in a comfortable position to tackle the risks and support the anticipated growth over the next year.
2015 promises to be another interesting year, albeit a challenging one, due to the macroeconomic and political uncertainties. We will remain focused on improving operating efficiency and net interest margins, whilst also continuing with our steady customer acquisition drive and migration to alternate service and distribution channels. Naturally, an emphasis on alternate channels also aligns with the efficiency drive by reducing our cost to serve and ultimately enhancing our cost-to-income ratio. We will seek to moderate cost of risk by consolidating our risk acceptance criteria in an increasingly high-risk environment, while focusing on deposit growth. Overall, we are confident our progress will be sustained, as we continue to grow our market share, and improve our margins and efficiency ratios.”