FCMB Group Plc has again proved its resilience and capability to deliver outstanding performance and returns to customers and shareholders, going by its half year results released recently. For the six months ended June 30, 2020, the Group’s profit before tax (PBT) rose by 26 per cent to N11.1 billion compared to N8.8 billion in the corresponding period in 2019. Profit after tax increased by 29 per cent, year-on-year(y-o-y), to N9.7 billion. This translates to a return on average equity (RoAE) of 9.4 per cent and earnings per share of 49 kobo, y-o-y improvement of 16 per cent and 29 per cent, respectively.
FCMB Group is a holding company divided along three business groups; Commercial and Retail Banking (First City Monument Bank Limited, Credit Direct Limited, FCMB (UK) Limited and FCMB Microfinance Bank Limited); Corporate & Investment Banking (the Corporate Banking Division of the Bank, FCMB Capital Markets Limited and CSL Stockbrokers Limited) as well as Asset & Wealth Management (FCMB Pensions Limited, FCMB Asset Management Limited and FCMB Trustees Limited).
The half year results also showed that the Group recorded an increase in gross revenue by 9 per cent to N98.2 billion as against N89.8 billion for the same period last year. Net interest income equally rose by 17 per cent 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 six months period last year. Moreover, the financial institution intensified the tempo of its strong commitment and support to the growth of businesses and the Nigerian economy in general. For example, loans and advances grew by 29 per cent y-o-y and four per cent quarter-on-quarter (q-o-q) to N794.6 billion. Customer deposits went up by 28 per cent y-o-y and 11 per cent q-o-q to N1.1 trillion in June 2020, implying a significant increase in confidence in the institution. Total assets surged upward by 31 per cent y-o-y and four per cent q-o-q to N1.97 trillion as at June 2020. The Group’s capital adequacy ratio stood at 17.3 per cent, which is above the minimum requirement set by the Central Bank of Nigeria. Liquidity ratio was 32.2 per cent. Customer base across the Group grew by 29 per cent q-o-q from 5.9 million to 7.7 million. The subsidiaries of FCMB Group, which are market leaders in their respective segments, also performed satisfactorily within the six months period.
The Commercial and Retail Banking arm (comprising 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 PBT.
This was due to an increase in net interest income, fixed income instruments, trading income and foreign exchange income. PBT 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. Corporate & Investment Banking (comprising the Corporate Banking Division of the Bank, FCMB Capital Markets Limited and CSL Stockbrokers Limited) saw its performance improve Quarter-on-Quarter. This was driven by an increase in net interest income and non-interest income. CSL Stockbrokers returned to strong and sustainable profitability, moving from a PBT of N18 million in half year 2019 to N201million in half year 2020, representing a 1034 per cent Year-Year growth. Investment Management (comprising FCMB Pensions Limited, FCMB Asset Management Limited and FCMB Trustees Limited) grew its Assets Under Management (AUM) by 7 per cent 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. Other business lines accounted for 53 per cent of the N99 billion Year-on-Year growth in AUM. Analysts are of the opinion that with this impressive performance despite the challenging operating environment, FCMB Group is on a stronger pedestal to sustain its leading position in the financial industry and the Nigerian economy.