Banking
Q3 2016: FCMB Makes N14.2b Profit As Customers’ Deposits Fall By 4%
By Modupe Gbadeyanka
FCMB Group Plc has finally released its unaudited group results for the nine-months ended September 30, 2016 as earlier promised.
It would be recalled that FCMB could not submit its results earlier as expected due to the bank’s interim audit, but promised to make the results available before the end of November 30, 2016.
In the released report, FCMB recorded a gross revenue of N140.7 billion for the period under review, indicating an increase of 29 percent from N109.3 billion for the same period prior year.
It also recorded a profit before tax of N14.2 billion for the nine-months ended September 30, 2016, a 453 percent rise from N2.6 billion for the nine-months ended September 2015.
Its non-interest income was N44.8 billion, an increase of 128 percent Year-on-Year (YoY) from N19.6 billion for the same period prior year.
FCMB explained that this increase was mainly driven by a 612 percent YoY increase in FX income, from N5.0 billion for the nine-months ended September 2015, to N35.3 billion for the nine-months ended September 2016.
Also, its net impairment on loans up 206 percent YoY to N31.3 billion for the nine-months ended September 2016, from N10.2 billion for the same period prior year, primarily due to oil and gas exposures and delayed salary payments, while its operating expenses were down 2 percent YoY to N49.3 billion, for the nine-months ended September 2016.
Also, loans and advances were flat Quarter-on-Quarter (QoQ) to N657.1 billion in September 2016 (N657.0 billion in June 2016), while the total assets was down 4 percent QoQ to N1.2 trillion in September 2016 (N1.3 trillion in June 2016).
It was also disclosed in the report that customer deposits shrank by 4 percent QoQ to N664.3 billion in September 2016 (N689.3 billion in June 2016).
Commenting on the results, Managing Director of FCMB Group Plc, Mr Peter Obaseki, noted that, “The audited nine months results for the period ended September 2016, reflects our focus on key soundness ratios and the need to maintain buffers against a sustained adverse operating environment.
“Accordingly, capital adequacy and liquidity ratios have held up at 17.6% and 36.8 percent, respectively.
“Underlying revenue momentum remains strong while cost optimisation programme led to a 2 percent YoY drop in operating expenses, despite inflationary spiral. Overall, profit before tax came in at N14.2bn, a 453 percent growth, translating to an EPS of 87 kobo, up 30.6 percent, YoY, respectively.
“The macro economic conditions in the final quarter remain challenging; we will keep up a conservative stance.”
Also, the Group Managing Director of FCMB Ltd, Mr Ladi Balogun, disclosed that, “The audited results of the bank reveal that the extraordinary performance of Q2 2016 offset the loss recorded in Q3 of N2.4 billion, thereby resulting in strong year on year profit growth of 913 percent.
“In order to avoid an unsustainable, non-cash, spike in earnings from further revaluation gains in Q3, the bank also significantly stepped up its loan loss provisions. The macroeconomic climate is taking a significant toll on the bank’s borrowing customers across all segments.
“Accordingly, the bank will maintain high provision coverage ratios (currently 131 percent), continue to strengthen our capital adequacy ratio (currently 16.9%) and our liquidity ratio (currently 36.8 percent).
“While our prudential ratios should continue to strengthen into Q4 (modestly buoyed by a tier 2 capital injection of N7.5bn in November), we do not anticipate improvement in the fourth quarter earnings.
“Nonetheless, we are pleased with the gains we continue to record in growing our business in areas such as retail banking (with a 315 percent YoY growth in profitability) and increasing our share of banking activities in the agricultural sector. In spite of the fact that we have seen several revenue lines diminish due to external factors – as we build a more resilient balance sheet, we will be well positioned for a strong rebound in core earnings in the medium term.”
Banking
CBN Insists Old, New Naira Notes Remain Valid Beyond December 31
By Aduragbemi Omiyale
The Central Bank of Nigeria (CBN) has reaffirmed that the old and new Naira notes will continue to be used for financial transactions in the country beyond December 31, 2024.
There had been rumours that the old and redesigned N200, N500, and N1,000 banknotes would no longer be legal tender from Wednesday, January 1, 2025, because the central bank would phase out the notes in compliance with a Supreme Court judgement of November 29, 2023.
But the apex bank, in a statement signed by its acting Director of Corporate Communications, Mrs Hakama Ali, on Friday, clarified that the apex court’s judgement being cited did not authorise the bank to phase out the banknotes by the end of this year.
According to her, the court allowed the CBN to leave the old and new notes to be used concurrently until it decides to gradually phase out the former.
The central bank’s spokesperson urged members of the public to disregard claims suggesting the old series of these denominations would cease to be valid at the end of this year.
She urged them to continue to accept all Naira notes for daily transactions, encouraging banks to also adopt alternative payment methods such as electronic channels to reduce the pressure on physical cash usage.
“The Central Bank of Nigeria (CBN) has observed the misinformation regarding the validity of the old N1000, N500, and N200 banknotes currently in circulation.
“In line with the bank’s previous clarifications and to offer further assurance, the CBN wishes to reiterate that the subsisting Supreme Court ruling granted on November 29, 2023, permits the concurrent circulation of all versions of the N1000, N500, and N200 denominations of the Naira indefinitely.
“For the avoidance of doubt, all versions of the naira, including the old and new designs of N1000, N500, and N200 denominations, as well as the commemorative and previous designs of the N100 denomination, remain valid and continue to be legal tender without any deadlines,” the statement noted.
Banking
Access Bank to Acquire 100% Equity in South Africa’s Bidvest
By Adedapo Adesanya
Access Bank Plc, the banking subsidiary of Access Holdings Plc, has entered into a binding agreement with South African-based Bidvest Group Limited for the acquisition of 100 per cent equity stake in Bidvest Bank Limited.
The deal for the 24-year-old South African lender is due to be completed in the second half of 2025, upon regulatory approval.
This shows Access Bank’s further expansion plans in line with goals set by its late founder, Mr Herbert Wigwe.
The agreement to acquire 100 percent stake in Bidvest Bank reflects Access Bank’s commitment to strengthening its footprint in South Africa and consolidating on its position as the continent’s gateway to global markets as it seeks to optimise the benefits of recent acquisitions and accelerate its transition towards a greater focus on efficiencies.
Bidvest Bank, founded in 2000 is a niche and profitable South African financial institution providing a diverse range of services, including corporate and business banking solutions and diverse retail banking products.
As of its year ended June 2024, Bidvest Bank reported total assets equivalent of $665million and audited profit before tax of $20million.
Upon conclusion of this acquisition, Bidvest Bank will be merged with the bank’s existing South African subsidiary to create an enlarged platform to anchor the regional growth strategy for the SADC region.
This is coming just as the bank opened a new branch in Malta as part of efforts to focus on international trade finance after obtaining a banking licence from the European Central Bank (ECB) and the Malta Financial Services Authority (MFSA).
Access Bank said the licence marks a transformative milestone in bolstering Europe-Africa trade flows.
The Maltese branch was established by Access Bank UK Limited, the subsidiary of Access Bank Plc, which is also the subsidiary of Access Holdings Plc, which is listed on the Nigerian Exchange (NGX) Limited.
Banking
Access Bank Opens Branch in Malta to Strengthen Europe-Africa Trade Ties
By Modupe Gbadeyanka
To strengthen Europe-Africa trade ties, Access Bank has opened a new branch in Malta. It will focus on international trade finance, employing approximately 30 people in its initial phase, with plans for controlled expansion over time.
It was learned that this Maltese branch was established by Access Bank UK Limited, the subsidiary of Access Bank Plc, which is also the subsidiary of Access Holdings Plc, which is listed on the Nigerian Exchange (NGX) Limited.
Access Bank Malta Limited commenced operations after obtaining a banking licence from the European Central Bank (ECB) and the Malta Financial Services Authority (MFSA).
Access Bank said the licence marks a transformative milestone in bolstering Europe-Africa trade flows.
Malta, a renowned international financial centre, and a gateway between the two continents, is strategically positioned to play a pivotal role in advancing commerce and fostering economic partnerships.
This strategic expansion into Malta enables The Access Bank UK Limited to leverage growing trade opportunities between Europe and Africa.
It underscores the organisation’s commitment to driving global trade, financial integration, and supporting businesses across these regions.
“By establishing operations in Malta, we will gain a foothold in a market that bridges European and North African economies, moving us one step closer to our goal of becoming Africa’s Gateway to the World.
“It further enhances our bank’s capacity to support clients with innovative solutions tailored to cross-border trade and investment opportunities,” the chief executive of Access Bank, Mr Roosevelt Ogbonna, stated.
“Europe has emerged as Africa’s leading trading partner, driven by initiatives such as the Economic Partnership Agreements between the EU and African regions and the African Continental Free Trade Area (AfCFTA).
“With Europe-Africa economic relations entering a new phase, The Access Bank Malta Limited is ideally positioned to deepen trade and meet the financing and banking needs of our clients in these expanding markets,” the chief executive of Access Bank UK, Mr Jamie Simmonds, commented.
Also speaking, the chief executive of Access Bank Malta, Renald Theuma, said, “Malta is uniquely positioned as a bridge between Europe and Africa, making it an ideal location for our subsidiary. This move allows The Access Bank Malta Limited to engage more closely with customers in Europe and deliver tailored financial solutions that drive growth and connectivity across both continents.”
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