FCMB Group reports 26% profit growth to N11.1bn in H1

By Charles Abuede

FCMB Group Plc has reported a growth of 26 percent in its pre-tax profits to N11.1 billion for the half year ended June 30, 2020. Last year it had posted N8.8 billion in pre-tax profits over a similar period.

The group same post-tax profit ink in 29 percent growth year-on-year at N9.7 billion also for the first half of 2020. The increase translates to a return on average equity of 9 per cent and earnings per share of 49 kobo, resulting in a year on year rise of 16 percent and 29 percent respectively.

The FCMB Group, comprising subsidiaries in retail and commercial banking, corporate and investment banking, as well as asset and wealth management, also reported that its gross revenue grew by nine percent to N98.2 billion as against N89.8 billion for the same period last year, adding that net interest income equally rose by 17 percent for the first half of 2020 to N45.4 billion from N38.7 billion posted in the first half of 2019, while non-interest income stood at N17.5 billion, an increase of 14 per cent compared to N15.3 billion within the corresponding six months period of 2019.

According a statement signed by Diran Olojo, group head, corporate affairs, the financial institution said it intensified its strong commitment and support to the growth of businesses and the Nigerian economy in general, as loans and advances grew by 29 per cent year-on-year and four per cent quarter-on-quarter to N794.6 billion. Similarly, the customer deposits went up by 28 per cent year-on-year and 11 per cent quarter-on-quarter to N1.1 trillion in June 2020, implying a significant increase in confidence in the institution.

The banking group’s total assets rose by 31 per cent year-on-year and four per cent quarter-on-quarter to N1.97 trillion as at June 2020, with its capital adequacy ratio standing at 17.3 per cent, comfortably above the minimum requirement set by the Central Bank of Nigeria (CBN). Its liquidity ratio stood at 32.2 per cent, while customer base across the group grew by 29 per cent year-on-year from 5.9 million to 7.7 million.

Individual subsidiaries’ performances were satisfactory within the first half of the year the statement noted. For instance, the commercial and retail Banking arm, which is made up of First City Monument Bank Limited, FCMB UK, Credit Direct Limited and FCMB Microfinance Bank, reported a 42.9 per cent year-on-year increase in pre-tax profit. It attributed the performance to an increase in net interest income, fixed income instruments, trading income and foreign exchange income. Pre-tax profit also improved by 4.1 per cent quarter-on-quarter due to an increase in fixed income instruments, trading income and FX Income, as well as a decrease in expenses due to operational efficiency.

For its corporate and investment banking arm, comprising the corporate banking division of the bank, FCMB Capital Markets Limited and CSL Stockbrokers Limited, it saw performance improve quarter-on-quarter, driven by an increase in net interest income and non-interest income. It specifically stated that CSL Stockbrokers returned to strong and sustainable profitability, as it moved from a pre-tax profit of N18 million in half-year 2019 to N201 million in half-year 2020, representing a 1034 per cent year-on-year growth.

On the other hand, its investment management operations, made up of FCMB Pensions Limited, FCMB Asset Management Limited and FCMB Trustees Limited, witnessed a growth in assets under management of seven percent quarter-on-quarter and 28 per cent year-on-year to N455 billion. “The growth in AUM reflects the increasing effectiveness of product sales strategy, which leverages the FCMB Group’s distribution strength and digital innovation. The Group’s Pensions business contributed 75 per cent of half-year 2020 AUM, compared with 83 per cent within the same period in 2019,” the financial group said.

It also disclosed that its other business lines accounted for 53 per cent of the N99 billion year-on-year growth in AUM.