BY CHARLES ABUEDE
FCMB Group has said it will leverage its digital platforms for the acquisition of an additional 1.5 million transacting customers across the group in the year 2022 as it reported more than 23 percent year on year growth in total customer deposit to N1.6 trillion in 2021 from N1.3 trillion in 2020.
The growth in the bank’s customer deposit was chiefly driven by CASA deposits, as a result of the bank’s sustained focus on retail banking, the bank revealed in its full-year financial statement for the year ended December 31, 2021 filed to the Nigerian Exchange.
The financial services institution which offers products and services for the commercial, corporate and institutional sectors in Nigeria and Europe, in its outlook projection for 2022 said, “We forecast profit before tax to grow above 25 percent on the back of improved earnings and performance across all our operating companies driven by: Acquisition of additional 1.5 million+ transacting customers across the group, leveraging on our digital platforms; non-interest income growth of above 25 percent driven by electronic banking fees and commissions from growth in transacting customers, and our asset management business.
“We hope to maintain deposit growth trajectory of above 20 percent; continued growth in digital lending; achieve profitability by Q4 in corporate, commercial and institutional banking by growing balance sheet, transactional and investment banking activities; a projected AuM growth of above 50 percent and consequent profit accretion from our pensions business; cost of risk and NPLs to be relatively stable; not exceeding a 30 basis points and 70 basis points increase respectively and a modest cost growth as we continue to execute our digital transformation plans.”
According to the full-year statement, the banking group reported a 6.3 percent year on year increase in its revenue to N212.01 billion in 2021 from N199.4 billion the previous year on the back of improved non-interest income earnings which grew by 23.7 percent year-on-year largely driven by growth in electronic fees and commissions income from the digital channels and trading income from higher volumes of fixed income instrument trades during the year.
The bank also recorded profit after taxation of N20.92 billion up by 6.7 percent in 2021, while profit before taxation rose 3.7 percent year on year to N22.72 billion.
The banking group revealed that its digital revenue rose 93 percent from N13.6 billion in 2020 to N26.1 billion in 2021 from digital activities, which accounted for 12.4 percent of gross earnings of the firm, resulting from the drive-by digital lending, mobile apps and cards.
As a result, the payments arm contributed N12.8 billion while lending generated N13.4 billion; and the group expects to see these key drivers of its revenues gain greater traction while increased traction in revenue from merchant solutions will continue in line with its focus on replicating the retail side’s success to its SME business.
Elsewhere, digital loans grew by over 242 percent from N17.8 billion in December 2020 to N60.8 billion in December 2021, accounting for 5.7 percent of the total loan portfolio and contributing 18.3 percent or N44 billion of the total loan growth (N240.9 billion) from January to December 2021.
However, during the year, the bank disbursed loans valued at N115 billion to 21,174 SMEs with an average ticket size of N5.4 million, while the retail digital loans portfolio size hit N12.6 billion as of the close of 2021 with 208,100 customers.
Also, the group said it maintained robust capital and liquidity buffers through the year, closing at 16.2 percent and 34.8 percent, respectively.
On a quarterly analysis, the group’s PBT declined 7.3 percent quarter on quarter, largely due to impairment charges absorbed in Q4. Year on year, PBT increased by 3.9 percent supported by improvements in non-interest income by 14.8 percent.
However, the net interest income increased 15.6 percent quarter on quarter driven by an increase in interest income from growth in loans and advances in Q4 and remained relatively stable year on year at N80.3 billion.
Also, the non-interest income increased 28.9 percent quarter on quarter, driven by an increase in FX Income from revaluation gains in Q4. Year on year growth of 14.8 percent was driven largely by an increase in fees and commissions as the bank continues to record traction from transacting customer activities on its platforms.
Furthermore, operating expenses decreased 17.4 percent quarter on quarter due to the accelerated amortisation of the regulatory cost (AMCON levy) in line with IFRS and increased 14 percent year on year as a result of regulatory costs, technology enhancement costs, coupled with the double-digit inflationary environment.
Elsewhere, its capital market business continued its growth trajectory, executing key market transactions during the year. This contributed to an increase in capital raising and advisory fees by 31 percent year on year.
Moreover, the value of stockbroking trades declined by 47 percent from N95.9 billion in 2020 to N50.9 billion in 2021 mainly driven by low foreign institutional investor activity in the market during the year. This contributed significantly to the 42 percent decline in brokerage commissions year on year.