FCMB Targets 10% Loan Growth, Modest Rise in 2019 Earnings

By Dipo Olowookere

Group CEO of First City Monument Bank (FCMB) Plc, Mr Ladi Balogun, has disclosed that the financial powerhouse hopes to grow its loan by 5 to 10 percent in the 2019 fiscal year.

Mr Balogun made this disclosure on Tuesday during the company’s FY 2018 analyst call in Lagos, which was monitored by Business Post.

According to him, apart from the 5-10 percent loan growth the bank is targeting in 2019, the lender hopes to see its fees and commissions record strong growth in the year.

He further stated that FCMB is anticipating a 20 percent rise in its deposit, precisely having more than a million new customers.

Mr Balogun explained that an increase in the number of the bank’s customers will mean more value to shareholders of the company.

The bank executive also said the financial institution will work to modestly improve its earnings in 2019 with focus on “growing customer base in personal and SME banking, balance sheet growth, improved liquidity and revenue growth in (on-pensions) asset management.”

On the macro environment, he noted that the bank looks forward to a 2-3 percent per annum growth in the Gross Domestic Product (GDP), an inflation rate between 10 and 11 percent, a moderate stance on monetary policy and a stable currency.

Furthermore, FCMB said it plans to raise tier II debt and retain profits this year to boost its balance sheet after the adoption of stricter accounting standards impacted its capital ratios.

Nigerian banks have been adopting stricter IFRS 9 accounting standards which require lenders to model credit loss risk based on expected rather than incurred losses and has a material impact on regulatory capital requirements.

Business Post reports that in the year, FCMB’s gross earnings increased from N169.9 billion in 2017 to N177.3 billion, while the net interest income appreciated to N72.6 billion from N70.5 billion, with the net trading income significantly rising to N6.2 billion from N2.4 billion.

During the year, fee and commission income brought N28 billion into the purse of the bank against N21.6 billion realized in the previous financial year.

Also, the net fee and commission income rose to N21.6 billion from N16.2 billion, but the amount generated from other income went down to N11.8 billion from N13.4 billion.

In the year, FCMB recorded a profit before tax of N18.4 billion against N10.7 billion in 2017, while the profit after tax rose to N15 billion from N8.6 billion, with the earnings per share increasing to 75 kobo from 43 kobo per share.