BY CHINYERE OBIORA, LAGOS – First City Monument Bank (FCMB) Group Plc has assured investors that despite the challenging macroeconomic and regulatory environments, it will continue to churn-out better-quality performance for value added in a sustainable manner.
The Group also said its subsidiaries are well-positioned to deliver more cutting-edge solutions that would provide the best customer experience in their respective target markets.
Giving the assurance at the 5th Annual General Meeting (AGM) in Lagos, the FCMB Group Plc said its audited accounts for the year ended December 31, 2017 are impressive and shareholders delight.
According to its books, the Group recorded gross revenue of N169.9 billion compared to N176.351 billion reported in the preceding year while the Profit After Tax (PAT) stood at N9.4 billion, representing about 34 per cent drop from N14.3 billion achieved in 2016 while Profit Before Tax (PBT) fell from N16.251 billion to N11.462 billion.
Also, its deposits grew to N689.9 billion as at the end of December 2017, an increase of five (5) per cent, from N657.6 billion recorded the previous year.
Total Non-Performing Loans (NPLs) and advances rose to N33.221 billion from N25.474 billion reported in the previous year, just as the Group’s capital adequacy ratio also improved to 16.9 per cent from 16.7 per cent, with its asset base rising to N1.19 trillion as against N1.17 trillion at the end of 2016.
Presenting the Chairman’s report, Mr Oladipupo Jadesimi said; “We will continue to shore up the capital of the bank through profit retention in preparation for the growth opportunities that we expect as the economy recovers’’.
He said the bank saw a few headwinds to profitability in 2017, noting that the high interest rate environment led to a ride in the bank’s funding cost.
Similarly, Jadesimi said deposits dropped due to customer migration to the relatively high yield treasury bills and government bonds, adding that despite the reduction in deposits, the bank witnessed an increase in cash reserve requirement that impacted liquidity and the bank’s earning capacity.
The Chairman said the bank continued to take a cautious approach towards lending in 2017 and consequently loans reduced marginally as net loans and advances went down by 15 per cent during the year.
Jadesimi expressed gratitude to shareholders for their continuous support, adding that: “Although we met with a number of challenges as a Group in 2017, I am pleased to say that we were able to surmount them, thanks to the commitment of all the personnel of our Group companies’’.
In his remarks at the AGM, Group Chief Executive Officer of FCMB Group Plc, Mr Ladi Balogun said; “In spite of the reduction in headline numbers, Group performance is an improvement over the previous year after adjusting for the significant foreign exchange (Forex) revaluation income enjoyed in 2016. The key drivers of the Group’s performance include increase in income from our non-banking activities, lower impairment charges from the bank and its subsidiaries, and improved operating efficiencies through more pervasive use of technology”.
He said the Group’s successful acquisition of majority 88.2 per cent stake in Legacy Pension Managers Limited, will further assist in diversifying service offerings and consequent earnings within the FCMB Group.
According to him, “We see significant growth opportunities in the Pension management industry in Nigeria as it is yet to achieve maturity and will support and facilitate strategic organic and inorganic growth initiatives that will position Legacy in the top-tier of its industry over the next few years.”
The Chief Executive also told the shareholders that their bank has shown “signs of improvement with growth in income levels (after adjusting for exceptional forex revaluation income in 2016), reduction in impairment charges and substantial growth in our UK business and Consumer Finance Business, after a difficult 2016. Commercial and Retail Banking remains our largest group, contributing 76.2 per cent of profits and 98.5 per cent of total assets.”
In addition, he said the Investment Banking arm: “Exhibited improved performance, from a loss position in 2016 of N84.0million after tax to a profit position of N430.3million after tax in 2017, largely driven by CSL Stockbrokers Limited. Our stock-broking business remains a top-3 player in its sector and participated as the sell-side broker on the largest ever trade on the Nigeria Stock Exchange in December 2017. CSLS Stockbrokers Limited and FCMB Capital Markets Limited jointly accounted for 4.1 per cent of profits.”
The FCMB’s shareholders at the meeting approved total dividend appropriation of N1.98 billion for the financial year, translating into a dividend of N0.10 kobo per share held by investors.
President of Progressive Shareholders Association of Nigeria (PSAN), Mr Boniface Okezie commended the board and management team of the FCMB group for sustaining dividend policy despite the harsh operating environment being witnessed in the economy.
He however cautioned that recent circular by the Central Bank of Nigeria (CBN) may make it difficult for the nation’s banks to operate profitably in future.
The PSAN lauded the board for the various awards received during the year, adding that the awards show that people are happy with the bank and entire company.