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H1 2012 Earnings: FCMB Declares N7.8 billion Profit Before Tax

By on July 30, 2012

MD, CEO of FCMB

First City Monument Bank PLC has announced its unaudited IFRS-compliant group results, which include the financials of its recently acquired entity, FinBank, a wholly owned subsidiary, for the six months ended 30 June 2012.

 

Key Highlights:

 

  •  Steady improvement in Year-on Year (YoY) performance

 

  •  Six months PBT as at June 2012 was up 17% YoY at N7.8bn.

 

  • Annualized ROE rose 38% in June 2012 to 10.2% from 7.4% for the corresponding period of 2011.

 

  • Group Net revenues for the same period were up 40% YoY at N32.4bn.

 

  • Operational expenses were up 69% YoY.

 

  • Second quarter PBT was down 23% Quarter-on-Quarter (QoQ) to N3.4bn as a result of a 20% one time surge in expenses, occasioned primarily by the on-going consolidation of FinBank. Similarly, Cost-to-Income Ratio (CIR) grew to 88.3% in 2Q12 from 77.8% in 1Q12, driven by the consolidation of FinBank financials. It is expected that, when integration is completed in 3Q12, the synergy effects will offset restructuring costs and barring unforeseen circumstances lead to CIR reduction and PBT improvement.

 

  • Modest Quarter on Quarter (QoQ) reduction in total deposits and loans by 3.7% and 3.2% respectively, as the bank unwound exposures to corporate clients in volatile sectors of the economy.

 

  • Improving balance sheet and earnings potential

 

  •  Deposit mix improved marginally to 54%, QoQ.

 

  •  Liquidity Ratio improved, YoY, by 28.7% to 58.7% in June 2012, compared to 45.6% in June 2011.

 

  •  Capital adequacy ratio reduced to 25.1% in 2Q12 from 26.4% in 1Q12 due to large interbank placement position.

 

  •  Net Interest Margin improved to 6.6% in 2Q12 from 6.1% in 1Q12, in spite of rising interest rate regime, as the bank continued to shed expensive wholesale deposits.

 

  • NPL temporarily rose to 6.4% in 2Q12 from 5.8% in 1Q12, as a result of loan book reduction and the consolidation of FinBank’s non-performing loans (fully provided for, but not yet written-off).

 

Commenting on the results, Mr. Ladi Balogun, Group Managing Director/ CEO of FCMB Plc, said:

“The Bank was marginally ahead of its forecast net revenue for the second quarter of 2012, in spite of the adverse interest rate environment, but profitability was dampened by the surge in expenses arising from the ongoing streamlining and consolidation of FinBank. With the delays in regulatory approval almost out of the way, we expect that the synergy benefits will not only be substantially realised in the fourth quarter of the year, but also still have a positive contribution to the 2012 financial year-end.

We will now accelerate the momentum, leveraging on the enlarged customer base, the distribution network from the recent acquisition, and success in retail finance, whilst focusing on high quality corporate names to resume, by 4Q12, sustainable growth in the wholesale banking segment.”