FCMB Group plc has released its financials for the first quarter ended 31 March, 2016, reporting gross revenue of N34.4 billion, as against N39.3 billion recorded within the same period in 2015. The holding company, which consists of First City Monument Bank (FCMB) Limited, FCMB Capital Markets Limited, CSL Stockbrokers Limited and CSL Trustees Limited, attributed the decline partially to non-recurrence of exchange revaluation gains, reducing yields and a marginal decline in earning assets.
Going by the details of the results announced on the floor of the Nigerian Stock Exchange (NSE), FCMB Group ended the first quarter of 2016 with a profit before tax of N2.2billion, compared to N5.8 billion for the first quarter of 2015. Net interest income stood at N17.2billion, a decline of 5 percet Year-on-Year (YoY) from N18.1billion for the same period prior year. Loans and advances reduced 5 percent Quarter-on-Quarter (QoQ) to N561.6 billion in March 2016.
However, the Group’s net fees and commissions were up 11 percent to N3.4 billion, from N3.0 billion for same period last year. In the same vein, the financial institution’s capital adequacy ratio increased to 18.5 percent, compared to 18.1 percent for the fourth quarter 2015, just as liquidity ratio rose to 38.2 percent, as against 35.9 percent for the fourth quarter of 2015. Operating expenses was flat at N16.5 billion.
Commenting on the results, the Managing Director of FCMB Group plc, Peter Obaseki, said that: “The continued lull in the economy, especially international trade, capital flows and government spending weighed on our group’s Q1 results; we are also, actively rebalancing our financial position by reducing wholesale deposits and slowing down loan growth, especially from lumpy sources; as a result, the retail business is getting more pronounced as the real growth driver’’.
He explained that, this approach is complementary to enhancing our capital position, liquidity management and cost saving initiatives. Core fees and commission which are not tied to loan expansion are showing a strong and sustainable trend, with YoY growth of 11 percent.We expect that subsequent quarterly earnings will improve upon Q1 2016, PBT of N2.2 billion, especially if government rolls out its expansionary budget and subject to well co-ordinated monetary stance.”
The Group Managing Director of FCMB Limited, Ladi Balogun, commented on the results, thus: “The commercial and retail banking division of FCMB Group witnessed improvements across a number of parameters when compared to prior quarter. We saw marginal improvements in cost to income ratio, net interest income and non-interest income. Cost of risk rose to 2.2 percent largely due to delayed salary payments in the public sector and the resultant effect in some of our consumer lending activities and prudent provisioning in our SME loan book for the year. We anticipate significant recoveries and reduced cost of risk in subsequent quarters. This, in addition to the momentum in the retail banking division, particularly cards and electronic banking as well as rapid growth in current and savings accounts, should fuel stronger performance in the second quarter of the year.”