Banking
FCMB: Braving the Odds to Deliver Value
Owing to the rising default in loan repayment forced by the COVID-19 pandemic and the declining economy that affected borrowers’ revenue inflow, First City Monument Bank (FCMB) faced an upsurge in credit loss expenses in the third quarter but its management waded through the strain and maintained the elevated profit performance it demonstrated at half-year.
The situation, which affected lenders globally, also forced the bank’s net loan impairment expenses to rise to N5.6 billion quarter-on-quarter in the third quarter ended in September 2020. This pushed up the year-to-date loan loss expenses to more than N13 billion, jerking up the year-on-year rise from 41 per cent at half-year to over 70 per cent at the end of the period.
The resumption of new lending in 2019 after two years of break, occasioned by the Loan to Deposit Ratio (LDR) policy of the Central Bank of Nigeria (CBN), appears to be fuelling the rising asset losses.
Last year, the bank grew the customer credit portfolio by 13 per cent and further growth of close to 11 per cent had happened at the end of the third quarter to N793 billion.
The bank’s management is not letting the asset quality strain to impede the impressive growth record of the bottom line. Instead, it gained speed on profit growth from the half-year position to 30 per cent year-on-year at the end of the third quarter.
FCMB is maintaining the path of growing profit for the third consecutive year though it has remained well below the peak profit figure of N22 billion attained as far back as 2014.
The bank maintained its earnings growth levers on the upbeat, spurred by a step up in interest earnings from 8 per cent growth at half year to 10 per cent increase year-on-year to N112 billion at the end of the third quarter. This was punctured by non-interest income, which shrank from 13 per cent increase at half-year to close flat at N34 billion at the end of September 2020.
Nevertheless, FCMB is still seeing the highest growth rate in revenue in four years in the current financial year. Interest income is growing at the highest rate in for the bank since 2014.
At over N146 billion at the end of the third quarter, gross earnings improved by 7.8 per cent year-on-year, slowing down from over 9 per cent improvement at half-year. This remains the best revenue growth record for the bank in four years against a slight decline in 2019.
Interest cost extended its benign behaviour in the third quarter with a year-on-year decline stepping up from 3 per cent at half-year to roughly 4 per cent to close at N44 billion at the end of the third quarter. Improving interest income with declining in interest expenses are the favourable combination for FCMB in 2020. The share of interest income devoted to interest expenses went down from 45 per cent to 39 per cent over the review period. The positive effect is a top record growth of 21 per cent in net interest income to N66 billion at the end of the third quarter compared to less than 5 per cent improvement at the end of 2019.
The major increase in impairment loss on financial assets however did not let all the increase in net interest income get down into profit. Net loan impairment expenses rose by 70 per cent to over N13 billion at the end of September 2020. The expenses claimed nearly 20 per cent of net interest income against 14 per cent in the same period last year.
With the strength of improving revenue and declining interest expenses, FCMB was able to dilute the impact of rising credit loss expenses and still add some momentum to the bottom line.
The bank closed the third quarter with an after-tax profit of roughly N14 billion, which is a year-on-year growth of 30 per cent – stepping up from 29 per cent record at half-year.
Profit is accelerating this year from 16 per cent growth the bank recorded at the end of 2019. The ability to grow profit more than three times ahead of revenue underscores a gain in profit margin this year. Net profit margin improved from 7.9 per cent in the same period last year to 9.5 per cent at the end of the third quarter. This is the highest net profit margin the bank has seen since 2015. The strength came from cost saving from interest expenses and a moderated operating cost during the review period.
The improvement in interest income reflects the expansion of earning assets with loans and advances growing by N77 billion over the 2019 closing figure of N715 billion and investments rising by N64 billion to over N303 billion over the same period.
Over the nine months of the year, it has grown the size of the balance sheet by N369 billion or 22 per cent to close at over N2 trillion – the strongest growth since 2012. Earnings per share amounted to 70 kobo at the end of the third quarter operations, improving from 54 kobo per share in the same period last year.
The bank remains on track with our full-year expectation that it would retain the key strengths of growing revenue, moderating interest expenses and improving profit margin and stay the course of rebuilding profit for the third straight year in 2020.
By Modupe Gbadeyanka
Sewa Capital Investment, an investment banking and financial advisory firm focused on supporting high-growth businesses across Africa, has made a strategic investment in Mathesis Analytics, a Nigerian financial technology company providing Artificial Intelligence (AI)-powered credit decisioning infrastructure.
The investment is expected to support Mathesis Analytics’ expansion drive for its AI-powered credit infrastructure in Nigeria.
Currently, Nigerian lenders face a critical structural gap: the fragmentation of verifiable consumer data makes it difficult to accurately price risk at scale. Mathesis directly addresses this bottleneck by aggregating disparate transactional and behavioural data into a real-time measure of creditworthiness.
The investment will support product development, institutional integrations, expansion of Mathesis’ lender network, and the strengthening of its data and technology infrastructure, a statement from the fintech firm stated.
By embedding this infrastructure, financial institutions can expand underwriting capacity, support more accurate risk-based lending decisions, and reach new market segments without compromising established risk thresholds.
For Mathesis Analytics, this investment represents an important milestone in its strategy to build Africa’s next-generation credit infrastructure to drive true financial inclusion.
Mathesis has already supported more than 8 million loans for over 2 million unique borrowers in Nigeria, providing a substantial operating base from which to deepen institutional adoption and expand into additional markets.
The company will leverage Sewa Capital’s backing to accelerate the expansion of its institutional footprint.
“At Sewa Capital, we are interested in businesses building the infrastructure that enables African economies to allocate capital more efficiently and inclusively.
“Mathesis Analytics is addressing a fundamental constraint in credit markets: the information gap that limits lenders’ ability to assess risk confidently.
“Its technology has the potential to expand responsible access to credit in Nigeria and, over time, across Africa. We are pleased to support the team through its next phase of growth,” the Managing Director of Sewa Capital, Ms Angela Jide-Jones, commented.
The chief executive of Mathesis Analytics, Mr Winston Osuchukwu, in his reaction, said, “Credit inclusion begins with information visibility.
“Partnering with Sewa Capital accelerates the rollout of our infrastructure; equipping a wider network of lenders with the capabilities required to accurately evaluate risk and ultimately deliver credit services to previously excluded populations across the continent.”
By Aduragbemi Omiyale
Eligible innovators, financial institutions, Virtual Asset Service Providers (VASPs), financial technology (fintech) companies, and technology firms have been invited to apply for the second cohort of the Central Bank of Nigeria (CBN) Regulatory Sandbox Programme.
A statement signed by the acting Director of Corporate Communications and Investor Relations Department of the apex bank, Mrs Hakama Sidi-Ali, disclosed that entries opened on Wednesday, August 12, 2026, and will close on Monday, August 31, 2026.
Cohort 2 of the initiative introduces two dedicated testing tracks to support emerging technologies with the potential to strengthen Nigeria’s financial system while upholding high standards of consumer protection, financial stability, and market integrity.
According to the central bank, the two tracks are VASP and Data-Enabled Financial Services (Non-VASP).
VASP track is to support innovative virtual asset, stablecoin, payment, settlement, custody, wallet, and related financial infrastructure solutions that require supervised live testing, while the non-VASP track supports innovations that leverage secure digital infrastructure and permission-based data sharing to improve financial inclusion, payments, credit, risk management, operational efficiency, and consumer outcomes.
The CBN Regulatory Sandbox provides a controlled environment in which eligible participants may test innovative financial products, services, business models, and enabling technologies under the supervision of the CBN.
The programme enables the CBN and innovators to engage constructively throughout the testing process, supporting regulatory learning while encouraging responsible innovation that benefits consumers and the wider financial system.
Eligible organisations whose proposed innovations fall within the programme’s scope are encouraged to apply.
Applications will be assessed based on the level of innovation, readiness for controlled live testing, potential consumer or market benefit, governance arrangements, risk management capability, and the suitability of the proposed testing plan.
Successful participants will undertake supervised testing within clearly defined parameters agreed with the CBN, including appropriate safeguards for consumer protection, operational resilience, cybersecurity, and regulatory reporting.
The central bank emphasised that participation in the scheme does not constitute a licence, authorisation, or approval to operate outside the approved testing parameters.
It noted that the Sandbox is intended to facilitate responsible experimentation, strengthen regulatory engagement, and support evidence-based policy development in line with the CBN’s statutory mandate.
By Aduragbemi Omiyale
The international spending limit on the GTBank Naira card has been increased by the financial institution to $40,000.
This information was revealed by the lender in an email to customers on Tuesday, August 11, 2026.
The banking subsidiary of GTCO Plc disclosed that the new offshore spending limit is for a quarter.
This development comes as the Nigerian foreign exchange (FX) market is witnessing stability against the United States Dollar.
The forex volatility experienced a few years ago has eased, allowing companies and others to plan within a reasonable exchange rate band.
“The Dollar limit on your GTBank Naira Card is now $40,000 quarterly,” the tier-1 commercial bank said in the message sighted by Business Post.
Improvement in forex liquidity in the domestic FX ecosystem has allowed Nigerians to use their local cards to complete financial transactions on foreign platforms, which was not possible a few years ago because of Dollar scarcity and arbitrage.
At the official market on Tuesday, the exchange rate closed at N1,364/$1. It was exchanged at N1,367/$1 at the GTBank FX desk and N1,395/$1 at the parallel market.
