FCMB records N9.9bn Net Loss, Proposes Bonus Issue

First City Monument Bank Plc has announced a net loss of N9.9bn for the full year ended December 31, 2011.

The bank’s profit after tax, which stood at N7.9bn in December 2010, fell by 225 per cent to a loss position of N9.9bn.

Explaining the loss on Monday, the company stated that its net revenue of N54bn was affected by a significant impairment charge of N29bn in the fourth quarter of 2011.

The statement said that the loss was due to the underwriting of several share issues, dating back to 2009, and some non-performing loans sold to the Asset Management Company of Nigeria.

“All legacy loans and weaknesses associated with capital market and oil and gas transactions have been fully regularised through sales to AMCON or outright provisioning/ write-offs,” the bank said in a statement.

The results showed that the bank’s gross earnings, however, rose by 28.3 per cent from N62.8bn in 2010 to N80bn in the year under consideration, while its net operating income rose by 34.5 per cent to 53.8bn up from N40.2bn in 2010.

Thus, the bank has proposed a bonus issue of three new shares for every 20 existing shares held by shareholders as at April 2012.

The statement added that the company expected an improved performance in the next quarter on the back of its merger with Finbank.

It said, “Underlying operational performance was strong as evidenced by the growth indices. The bank’s financial health indicators are also in excellent shape as evidenced by its ratios, particularly asset quality, liquidity and capital adequacy.

“Management expects that the first half of 2012 will see continued improvements and is likely to exceed its released forecasts. Management also expects earnings accretion in the second half of 2012, as FinBank merges with FCMB on July 1, 2012.”

The Chief Financial Officer for FinBank, who is also the Integration Director for FinBank and FCMB, Mr. Patrick Iyamabo, was quoted in a statement last week as saying, “We are on track to meet our integration timeline. A rapid integration process will help contain costs, facilitate accelerated earnings accretion and fast track customer benefits.”

He added that the merger would result in some branch overlaps, which would mean limited branch closures. In those instances, he said customers would be able to use nearby branches that would offer best-in-class products, services and technology.