UPDATED: FCMB Anticipates Decline in Q4 Earnings, Profit

By Dipo Olowookere

Mid-level Nigerian lender, FCMB Group Plc, has informed its shareholders and the investing public that its post-tax profit should be about N4.1 billion in the fourth quarter of 2020.

Businesses have struggled to stay active this year as a result of the coronavirus pandemic, which humbled most economies of the globe, including the United States, the United Kingdom, France and others.

Most players in the financial sector, where FCMB operates, have been forced to work remotely because of the health crisis.

In April and May 2020, banks in Nigeria were shut down because of the lockdown declared in Lagos, Abuja and Ogun State and even after restrictions have now been eased, some commercial banks are yet to return to how they used to operate before the virus outbreak.

Some bank workers in the operations department have continued to work from home, while some customers have refused to visit the banking halls because of fear of the contagion.

Last week, the National Bureau of Statistics (NBS) said the gross domestic product (GDP), which measures economic activities, contracted by 6.10 per cent in the second quarter of the year as a result of COVID-19.

In a report published by Business Post on Friday, it was projected that businesses in Nigeria will likely regain normalcy from August 2021.

In a notice to the investing public yesterday, FCMB also said it anticipates its pre-tax profit should close at N4.7 billion in the same period under consideration.

When compared with the same period of 2019, the Q4 net profit expectation will be 40.6 per cent lower than the N6.9 billion last year. For the pre-tax profit in Q4 2020, it is 34.7 per cent lower than the N7.2 billion recorded in the fourth quarter of last year.

In the forecast, the lender said its gross earnings should drop 10.6 per cent year-on-year to N45.5 billion from N50.9 billion, while the interest income is anticipated to reduce by 6.1 per cent year-on-year to N37.1 billion from N39.5 billion, with the interest expense expected to remain flat at N18.4 billion in the comparative periods and the net interest income predicted to drop to N18.7 billion from N21.1 billion.

Business Post reports that shares of FCMB have recently found life again at the stock market, rising to the N2 region a few days ago after months of trading below the level. The stock closed 2.38 per cent or 5 kobo higher on Friday to quote at N2.15 per unit.

Editor’s Note:

In our earlier report, we erroneously put the earnings forecast as the final year 2020, instead of the fourth quarter of 2020. We sincerely apologise for this error.