Economy

FCMB Sustains New Strengths in Q2

Published

5 years ago

10/08/2020

First City Monument Bank (FCMB) sustained new strengths in operations in the second quarter despite the challenges of the COVID-19 economic lockdown. The bank kept all the growth levers up from the closing levels in 2019.

The addition of new strengths and retention of some key capabilities of the preceding year constitutes the operating advantage for the bank this year. It is maintaining the elevated revenue outlook seen in the first quarter, which is happening for the first time since 2017.

Both interest and non-interest incomes are contributing to revenue improvement but non-interest earnings keep leading the way. Against a drop of 11 per cent in 2019, non-interest income grew by 13 per cent year-on-year at half-year ended June 2020.

Interest income is still accelerating from 4 per cent at the end of last year to 8 per cent at half-year though slowing down from 15 per cent growth in the first quarter. This remains the highest growth rate in interest income for the bank at any time since 2014.

The good behaviour of interest expenses seen in the first quarter improved to better in the second quarter. From a moderated growth of 4 per cent in the first quarter, interest expenses proceeded to a 3 per cent decline year-on-year at half-year.

Accelerating interest income and a decline in interest expenses enabled an increase of 17 per cent in net interest income from less than 5 per cent improvement at the end of 2019.

This marks the first reasonable improvement in revenue the bank is seeing since 2017. Last year ended with only a 2 per cent increase in gross income to a little over N181 billion. Revenue growth at half-year represents the highest in four years.

The retained strength in revenue is keeping the bottom line on the upbeat at which the bank began the year in the first quarter.

Profit improvement remains quite good at 29 per cent year-on-year for FCMB at half-year – still one of the best growth records in the banking sector. This is an accelerating growth from the 16 per cent profit improvement at the end of 2019.

The ability to convert revenue into profit improved both on a year-on-year basis and from the 2019 closing mark.

At the end of half-year, the net profit margin stretched out from 8.4 per cent in the same period last year and from 9.5 per cent at the end of 2019 to 10 per cent.

This is a step back, however, from 11 per cent in the first quarter but yet remains the highest net profit margin for the bank since 2015.

The bank’s operating strength for the 2020 financial year is anchored on growing revenue and improving profit margin. The strength to grow profit more than two and a half times as fast as revenue at half-year points to a reasonable cost saving achieved by management. This came from a decline in interest expenses and a moderated operating cost during the period.

The loss in the first quarter of a key strength of last year – which is a drop in net loan impairment expenses for the third straight year, remained in place at half-year.

Loan loss expenses rose by close to 41 per cent to N7.8 billion at the end of June 2020. The increase follows an increase of 13 per cent in the loan portfolio last year and by another 10 per cent over the first half of the current financial year to N795 billion.

Half-year operations ended with gross earnings of slightly over N98 billion for FCMB, an accelerated growth from 2.3 per cent at the end of 2019 to 9 per cent year-on-year. This marks the first reasonable improvement in revenue since 2017.

An improvement of 8 per cent in interest income to over N76 billion is one of the new strengths for FCMB in 2020.

This reflects the expansion of earning assets with loans and advances growing by N80 billion over the 2019 closing figure of N715 billion and investments rising by N60 billion to N300 billion over the same period. The second is a rebound in non-interest earnings that were a drag for the bank last year to N22 billion at the end of half-year.

At slightly N30.8 billion, interest expenses improved further its disciplined behaviour – declining by 3 per cent against an increase of 4 per cent in the first quarter. The share of interest income devoted to interest expenses went down from 45 per cent to 40 per cent over the review period. The result is an increase of 17 per cent in net interest income to over N45 billion at half-year.

FCMB closed the half-year operations in June 2020 with an after-tax profit of N9.7 billion, an increase of 29 per cent year-on-year. The bank is maintaining the path of growing profit for the third consecutive year since it lost 40 per cent of profit in 2017.

Earnings per share amounted to 49 kobo at the end of half-year operations, improving from 38 kobo per share in the same period last year.

The ability to maintain an elevated performance in earnings through the economic lockdown in the second quarter is a bullish point for FCMB going forward to the second half.

The bank is expected to retain the key strengths of growing revenue, moderating interest expenses, and improving profit margin to stay the course of rebuilding profit for the third straight year in 2020.

Economy

NBA Demands Suspension of Controversial Tax Laws

Published

7 hours ago

24/12/2025

Modupe Gbadeyanka

By Modupe Gbadeyanka

The federal government has been asked by the Nigerian Bar Association (NBA) to suspend the implementation of the controversial tax laws.

In a reaction to the tax reform acts, the president of the group, Mr Afam Osigwe (SAN), the suspension of the laws would allow for a proper investigation into allegations of alterations in the gazetted and harmonised copies.

A member of the House of Representatives, Mr Abdussamad Dasuki, alleged that some parts of the laws passed by the parliament were different from the gazetted copy.

To address the issues raised, the NBA said it is “imperative that a comprehensive, open, and transparent investigation be conducted to clarify the circumstances surrounding the enactment of the laws and to restore public confidence in the legislative process.”

“Until these issues are fully examined and resolved, all plans for the implementation of the Tax Reform Acts should be immediately suspended,” the association declared.

It noted that the controversies “raise grave concerns about the integrity, transparency, and credibility of Nigeria’s legislative process.”

“These developments strike at the very heart of constitutional governance and call into question the procedural sanctity that must attend lawmaking in a democratic society,” it noted.

“Legal and policy uncertainty of this magnitude has far-reaching consequences. It unsettles the business environment, erodes investor confidence, and creates unpredictability for individuals, businesses, and institutions required to comply with the law. Such uncertainty is inimical to economic stability and should have no place in a system governed by the rule of law.

“Nigeria’s constitutional democracy demands that laws, especially those with profound economic and social implications, emerge from processes that are transparent, accountable, and beyond reproach. Anything short of this undermines public trust and weakens the foundation upon which lawful governance rests.

“We therefore call on all relevant authorities to act swiftly and responsibly in addressing this controversy, in the overriding interest of constitutional order, economic stability, and the preservation of the rule of law,” the organisation stated.

Economy

MRS Oil, Two Others Raise NASD Bourse Higher by 0.52%

Published

9 hours ago

24/12/2025

Adedapo Adesanya

By Adedapo Adesanya

Demand for hot stocks, including MRS Oil Plc, buoyed the NASD Over-the-Counter (OTC) Securities Exchange by 0.52 per cent on Tuesday, December 23.

The energy company was one of the three price gainers for the session as it chalked up N19.69 to sell at N216.59 per share versus the previous day’s value of N196.90 per share.

Further, FrieslandCampina Wamco Nigeria Plc gained N2.95 to close at N56.75 per unit versus N53.80 per unit and Golden Capital Plc appreciated by 84 Kobo to N9.29 per share from Monday’s N8.45 per share.

Consequently, the market capitalisation went up by N10.95 billion to N2.125 trillion from N2.125 trillion and the NASD Unlisted Security Index (NSI) rose by 18.31 points to 3,570.37 points from 3,552.06 points.

Yesterday, the NASD bourse recorded a price loser, the Central Securities Clearing System Plc (CSCS), which gave up 17 Kobo to close at N33.70 per unit against the previous trading value of N33.87 per unit.

The volume of securities traded at the session went down by 97.6 per cent to 297,902 units from the previous day’s 12.6 million units, the value of securities decreased by 98.5 per cent to N10.5 million from N713.6 million, and the number of deals remained flat at 32 deals.

By value, Infrastructure Credit Guarantee Company (InfraCredit) Plc ended as the most actively traded stock on a year-to-date basis with 5.8 billion units exchanged for N16.4 billion. This was followed by Okitipupa Plc, which traded 178.9 million units valued at N9.5 billion, and MRS Oil Plc with 36.1 million units worth N4.9 billion.

In terms of volume, also on a year-to-date basis, InfraCredit Plc led the chart with a turnover of 5.8 billion units traded for N16.4 billion. Industrial and General Insurance (IGI) Plc ranked second with 1.2 billion units sold for N420.7 million, while Impresit Bakolori Plc followed with the sale of 536.9 million units valued at N524.9 million.

Economy

NGX All-Share Index Soars to 153,354.13 points

Published

10 hours ago

24/12/2025

Dipo Olowookere

By Dipo Olowookere

It was another bullish trading session for the Nigerian Exchange (NGX) Limited as it closed higher by 0.59 per cent on Tuesday.

The market further rallied due to continued interest in large and mid-cap stocks on the exchange by investors rebalancing their portfolios for the year-end.

Yesterday, Aluminium Extrusion sustained its upward trajectory after it further appreciated by 9.96 per cent to N14.90, as Austin Laz gained 9.81 per cent to close at N2.91, Custodian Investment improved by 9.69 per cent to N38.50, and First Holdco soared by 9.35 per cent to N50.30.

Conversely, Royal Exchange declined by 7.22 per cent to N1.80, Champion Breweries shrank by 6.57 per cent to N15.65, NASCON lost 5.36 per cent to trade at N105.05, Sovereign Trust Insurance depreciated by 5.28 per cent to N3.77, and Japaul went down by 4.51 per cent to N2.33.

At the close of business, 29 shares ended on the gainers’ table and 27 shares finished on the losers’ log, representing a positive market breadth index and bullish investor sentiment.

This raised the All-Share Index (ASI) by 895.06 points to 153,354.13 points from 152,459.07 points and lifted the market capitalisation by N579 billion to N97.772 trillion from the previous day’s N97.193 trillion.

VFD Group finished the day as the busiest stock after it recorded a turnover of 192.0 million units worth N2.1 billion, GTCO exchanged 63.5 million units valued at N5.6 billion, Access Holdings traded 49.8 million units for N1.0 billion, First Holdco sold 45.8 million units valued at N2.3 billion, and Secure Electronic Technology transacted 38.3 million units worth N28.4 million.

In all, market participants bought and sold 677.4 million units valued at N20.8 billion in 27,589 deals compared with the 451.5 million units worth N13.0 billion traded in 33,327 deals on Monday, showing an improvement in the trading volume and value by 50.03 per cent and 60.00 per cent apiece, and a shortfall in the number of deals by 17.22 per cent.