Economy
FCMB Sustains New Strengths in Q2
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.
By Adedapo Adesanya
The Minister of State for Petroleum Resources (Oil), Mr Heineken Lokpobiri, has said ongoing reforms and strategic policy implementation in Nigeria’s petroleum sector are driving significant investments and strengthening the country’s position as a leading energy destination in Africa.
Mr Lokpobiri stated this at the Management Retreat of the Ministry of Petroleum Resources, where he stressed the need for improved institutional performance and accountability to sustain growth in the sector.
According to the Minister, the federal government has deliberately pursued far-reaching reforms aimed at creating a stable and investor-friendly environment capable of attracting local and foreign capital into the oil and gas industry.
“From far-reaching institutional reforms to the effective implementation of strategic policies, we have remained committed to carrying all stakeholders along, fostering a conducive environment for investments to flourish,” Mr Lokpobiri said.
“As a result, our petroleum sector has witnessed significant investments that continue to strengthen Nigeria’s position as a leading energy destination.”
The Minister noted that the gains recorded in the sector were the product of collective efforts across the Ministry and its agencies, commending staff for their dedication and professionalism.
“The Management Retreat of the Ministry of Petroleum Resources provided an important platform to reiterate that these accomplishments would not have been possible without the collective dedication, professionalism and teamwork of every staff member across the Ministry and its agencies,” he stated.
Mr Lokpobiri said the retreat, themed Driving Institutional Performance and Accountability in the Petroleum Sector for Sustainable National Development, underscored the importance of continuous improvement in service delivery and operational efficiency.
Drawing lessons from the theme, he urged officials of the Ministry and regulatory agencies to intensify efforts toward enhancing institutional effectiveness and strengthening governance frameworks.
“I encouraged that we must redouble our efforts, continuously improve the quality of our services, and strengthen institutional performance,” he said.
The Minister further emphasised the continued relevance of fossil fuels in the global energy mix, stressing that Nigeria must leverage its hydrocarbon resources to drive economic growth while ensuring citizens benefit from ongoing reforms.
“With fossil fuel as the dominant source of energy, we must ensure that Nigerians experience the benefits of our progress and that Nigeria remains the preferred investment destination in Africa and a globally competitive hub for energy investments,” Mr Lokpobiri added.
By Aduragbemi Omiyale
The N3.2 billion rights issue of Universal Insurance Plc has been extended by almost two weeks after securing regulatory approval.
The exercise was earlier scheduled to close on June 10, 2026, but will now close on Monday, June 22, 2026.
The extension was granted by the Securities and Exchange Commission (SEC) after a request from the underwriting organisation.
In the rights issue, Universal Insurance is offering to shareholders 2,666,666,667 ordinary shares of 50 Kobo each at N1.20 per share on the basis of one new ordinary share for every existing six ordinary shares held as of the close of business on Monday, March 30, 2026.
Subscription for the acquisition of the company’s extra shares opened on Wednesday, May 13, 2026.
The extension gives investors more time to increase their stake in the insurance firm, which intends to use proceeds from the exercise to boost its capital base, as mandated by the National Insurance Commission (NAICOM).
Insurance companies operating in Nigeria have been given till July 31, 2026, to shore up their capital base or pack up. Operators can also explore a merger if they wish.
By Dipo Olowookere
The Nigerian Exchange (NGX) Limited opened its doors to market participants in four days last week as a result of a public holiday observed on Friday, June 12, for 2026 Democracy Day in the country.
In the week, investors bought and sold 4.964 billion shares worth N207.521 billion in 235,966 deals, as against the 3.966 billion shares valued at N175.659 billion that exchanged hands in 343,587 deals a week earlier.
Analysis showed that the financial services industry led the activity chart with 4.116 billion shares valued at N84.607 billion in 96,165 deals, contributing 82.92 per cent and 40.77 per cent to the total trading volume and value, respectively.
The services sector transacted 232.479 million shares worth N4.955 billion in 17,614 deals, while the industrial goods segment exchanged 144.988 million shares worth N39.077 billion in 24,775 deals.
Sterling Holdings, FCMB, and Access Holdings were the most traded stocks with 2.883 billion units sold for N36.188 billion in 15,533 deals, accounting for 58.09 per cent and 17.44 per cent of the total trading volume and value, respectively.
A total of 40 equities appreciated in the week versus 23 equities in the previous week, 53 equities depreciated versus 65 equities a week earlier, and 53 equities remained unchanged versus 58 equities in the preceding week.
ABC Transport was the best-performing equity for the week after it gained 25.60 per cent to trade at N7.80, Consolidated Hallmark appreciated by 23.13 per cent to N8.25, Abbey Mortgage Bank rose by 21.93 per cent to N11.40, Infinity Trust Mortgage Bank grew by 20.32 per cent to N11.25, and Austin Laz soared by 15.16 per cent to N4.33.
The worst-performing equity last week was Fidson Healthcare because of its 25.86 per cent loss, closing at N101.20. Neimeth declined by 19.14 per cent to N8.55, Union Homes REIT shed 17.36 per cent to close at N70.00, SUNU Assurances slipped by 11.38 per cent to N3.97, and Unilever Nigeria dropped 10.26 per cent to trade at N140.00.
As for the index movement, the All-Share Index (ASI) and the market capitalisation chalked up 0.88 per cent each to settle at 244,738.74 points and N156.970 trillion, respectively.
Similarly, all other indices finished higher apart from the pension, AFR Bank Value, MERI Growth, MERI Value, consumer goods, Lotus II, industrial goods, sovereign bond and commodity indices, which fell by 0.03 per cent, 1.20 per cent, 0.21 per cent, 1.61 per cent, 0.54 per cent, 0.51 per cent, 1.00 per cent, 2.04 per cent and 0.34 per cent, respectively.
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