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FCMB anticipates lower profit for third quarter of 2015

By on January 21, 2016

FCMB Group Plc on Monday sent a profit warning to the stock market community, saying earnings and profitability for the third quarter ended September 30, 2015 will be lower than the figures of same period in corresponding period of 2014.
While other banks had announced their 2015 nine months results, FCMB had last October said it would delay in releasing its results.
“FCMB Group Plc would like to inform the investment community, of the commencement of the interim audit of First City Monument Bank Limited as at 30 September 2015, by KPMG, the bank’s auditors. For this reason, the 3Q15 results will be delayed.  The audited results will be released on the Nigerian Stock Exchange and to the investment community upon conclusion of KPMG’s audit,” the bank had said last October.
Giving an update on the interim audit on Monday, FCMB said the audit of the banking subsidiary’s interim result will be completed in the fourth week of January and this will pave the way for the release of Q3:2015 earnings result for FCMB group Plc, before the end of January.
However, the Managing Director of FCMB Group Plc, Peter Obaseki, said the Q3:2015 earnings are  expected to be below results from the same period in the corresponding year (Q3:2014).
He attributed the expected weaker performance to spike in impairments particularly in the energy sector and the significant reduction in trade finance-related revenues due to foreign exchange illiquidity.
FCMB had reported revenue of N77.35 billon for  the first half of 2015, up by 11 per cent from N69.62 billion in the corresponding period of 2014. However, profit before tax and after tax fell by 14 per cent from N11.140 billion to N9.56 billion and N9.68 billon to N8.3 billion respectively.
Commenting on the results,  Obaseki  had said “The economy has entered a higher risk level with inflation climbing to 9.2 per cent , fiscal and trade deficits, as well as, declining GDP growth rate below four per cent  as at Q1 2015 from 5.94 per cent  as at Q4 2014; broad money supply (MM2) contracted by N380 billion in June, from N19.19 trillion in May, to N18.81 trillion. The group results for H1 2015 reflects a deliberate conservative stance aimed at maintaining robust capital buffers in the face of a tough macro-economic and regulatory environment.”
Speaking in the same vein, Group Managing Director/ CEO of FCMB Limited, Mr. Ladi Balogun, said: “H1 2015 was characterised by significant macro-economic and policy headwinds. Limited supply of foreign exchange had a major impact on the commercial & retail banking group’s (CRBG) trade finance and foreign exchange trading income. The harmonisation of the cash reserve requirement to 31 per cent led to a significant rise in our restricted reserves and consequently constrained lending and put pressure on net interest margins.”

 

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