FCMB reports 78.5% decline in profit

…recommends a dividend of 10 kobo


FCMB Group Plc (FCMB) has released its financials for the year ended December 31, 2015, reporting a profit after tax (PAT) decline of 78.5 per cent to N4.76 billion from N22 billion recorded in 2014.

Also, profit after tax stood at N7.8billion, after dropping by 67.6 per cent from N23.9 billion in prior year results.

Following these, the financial institution has recommended a dividend of 10 kobo per share.
Going by the audited results, FCMB’s revenue was up by three per cent to N152.5 billion in 2015, as against N148.6 billion in 2014.

This was in spite of the challenging macroeconomic and regulatory environment.
However, net interest income decreased by 12 percent Year-on-Year (YoY) to N63.9 billion, compared to N72.6 billion in the previous year.

Fees and commissions rose by 10 per cent to N15.8 billion, driven by a strong surge in electronic banking income, offsetting the drop in Commission on Turnover and Trade Finance fees. Other income dropped by 31 per cent to N8.8 billion due to a N4.8 billion reduction in foreign exchange gains. Total assets dropped marginally by one per cent to N1.16 trillion.

Commenting on the financial results, Managing Director of FCMB Group Plc, Mr. Peter Obaseki, said: "Full year 2015 result, came in with profit after tax of N4.8 billion; although underlying top-line and sustainable revenue momentum remains strong and in line with our strategic thrust. Key soundness ratios, including liquidity and capital buffers, were maintained in a rather challenging operating environment within all the operating companies. 

The clear and direct future challenge is to unlock more value to shareholders by tackling operational efficiencies and accelerating the pace of momentum, not just in the bank but also microfinance and wealth management".

In his comments, the Group Managing Director/CEO, First City Monument Bank Limited, a key subsidiary of FCMB Group Plc, Mr. Ladi Balogun, stated that:

"The commercial and retail banking arm of the group saw a significant drop in profitability for the full year to N6.5 billion PBT, following the impairments from two significant defaulting obligors reported in our Q3 audited results. The full year's performance was also adversely affected by a 44 per cent drop in foreign exchange income and a 12 per cent drop in net interest income, largely caused by foreign exchange policy and impact of cash reserve requirement ratios till Q4. 

The strong turnaround witnessed in Q4 PBT was driven largely by recoveries in the retail book, improving net interest margins in Q4 and strong fees and commissions throughout the year. Inspite of the challenging policy and macroeconomic environment we believe that these trends will continue,  and we will witness a steady improvement in performance indices in 2016 as our retail and transaction banking activities continue to evolve positively, our loan recovery efforts yield results and our efficiency drive gathers more momentum".