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FCMB Records Capital Ratio of 16.9% in 2017, Targets Improved Earnings in 2018

By Dipo Olowookere

One of the leading banking groups headquartered in Lagos, FCMB Group Plc, has shown a strong performance in the year ended December 31, 2017.

In its financial statements released this week, the lender recorded an improvement in its capital adequacy ratio, appreciating by 16.9 percent last year from 16.7 percent two years ago.

This was as the company’s asset base increased to N1.19 trillion in 2017 from N1.17 trillion at the end of 2016.

In addition, the non-interest income as at the end of 2017 was N32 billion, while loans and advances stood at N649.8 billion.

The gross revenue as at December 31, 2017 was N169.9 billion and the profit before tax (PBT) closed at N11.5 billion, while the profit after tax (PAT) was N9.4 billion.

 And in demonstration of the enhanced confidence of customers in FCMB, deposits grew to N689.9 billion as at the end of December 2017, an increase of 5 percent from N657.6 billion in the corresponding year.

In November 2017, FCMB completed the acquisition of an additional 60 percent stake in Legacy Pension Managers Limited, which increased FCMB’s stake from 28.2 percent to 88.2 percent, thereby making Legacy a subsidiary of FCMB.

The acquisition helps achieve further diversification of service offerings and, consequently, earnings within the FCMB Group, which will be felt from the 2018 financial year.

FCMB Microfinance Bank Limited, the Group’s dedicated group lending and financial inclusion vehicle, commenced operations as a state microfinance bank in January 2017. The business will be the key driver of FCMB’s informal and agricultural sectors (particularly small-holder farmers) drive across the country. These two sectors account for over 40 percent of the country’s gross domestic product (GDP).

Following these developments, FCMB Group Plc’s operating companies are now 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); Investment Banking (FCMB Capital Markets Limited and CSL Stockbrokers Limited); and Asset & Wealth Management (Legacy Pension Managers Limited, First City Asset Management Limited and CSL Trustees Limited).

In a statement, the FCMB Group said, “In spite of the reduction in the headline numbers, the Group’s performance for the year 2017 witnessed an improvement in core operating performance over the previous year after adjusting for the significant foreign exchange revaluation income enjoyed in 2016.

“In line with the repositioning strategy of the Group for better performance, the key drivers of the 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.”

The financial institution assured that, “Barring any unforeseen circumstances, we see improved operating performance in 2018 based on the improving macro-economic and capital markets environment, declining cost of funds for the bank, and the growing contributions of asset and wealth management following last year’s acquisitions.”

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan. Mr Olowookere can be reached via dipo.olowookere@businesspost.ng

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