FCMB Announces Big Profit, Shares Plan to Meet new Capital Requirements

• A profit before taxes of N111.9 billion was announced by First City Monument Bank for the fiscal year that ended on December 31, 2024
• The 71% increase in PBT was caused by a 56.6% decline in revaluation income and a 1.9% decline in net interest margin
• This improvement was primarily driven by an 8.7% increase in non-interest income and a 75.2% increase in interest revenue

Legit.ng journalist Zainab Iwayemi has 5-year-experience covering the Economy, Technology, and Capital Market.

For the fiscal year that concluded on December 31, 2024, First City Monument Bank reported a profit before taxes of N111.9 billion.

This is contained in a financial statement filed on the Nigerian Exchange.

According to the statement, a 56.6% drop in revaluation income and a 1.9% drop in net interest margin contributed to the 71% growth in PBT.

For the quarter ending December 2024, the Group's gross revenue was N794.4 billion, up 53.9% from N516.4 billion the year before.

Read also

Top Nigerian states with highest, lowest external debts to China, IMF, others as Lagos leads

A 75.2% increase in interest revenue and an 8.7% increase in non-interest income were the main drivers of this gain.

An annual decline of 55.7% in other gains, from N89.3 billion to N39.6 billion, limited the rise of non-interest income.

By December 2024, net interest income had increased from N176.6 billion the previous year to N225.3 billion, a 27.6% increase.

Earning asset yield increased to 16.2 percent. However, a 122% increase in funding costs caused the Net Interest Margin to drop by 1.9%.

Operating expenses rose 45.7% year over year to N229.1 billion due to inflationary pressures, greater staff costs, regulatory charges, and expenses associated with foreign exchange.

For the period ending December 2024, the cost-to-income ratio closed at 59.9%.

The net impairment loss on financial assets decreased from N59.5 billion to N41.2 billion, a 30.7 percent year-over-year decrease, bringing the cost of risk down from 3% to 1.8%.

Read also

FG repays China, World Bank, IMF, other loans as Nigeria’s debt hits N144.6 trillion

While the banking group saw a 7.7 percent decline, the Group's divisions saw year-over-year growth, with consumer finance increasing by 83.5 percent and investment management by 27.9 percent.

With almost 30% of profits coming from non-bank companies, group earnings were diverse.

The total amount of loans and advances at the end of December 2024 was N2.36 trillion, up 28% year over year.

The total assets at the end of December 2024 increased from N4.42 trillion to N7.05 trillion, a 59.5 percent year-over-year increase.

By December 2024, customer deposits had increased by 39.4% year over year to N4.30 trillion from N3.08 trillion.

On recapitalisation, the statement read,

“In line with the CBN’s directive, the Group focused on strengthening the banking franchise and building a more resilient balance sheet in 2024.

“We completed the first phase of our capital-raising programme, securing N144.6 billion through a public offer. This doubled issued shares from 19.8 billion in 2023 to 39.6 billion in 2024, impacting EPS.

Read also

Naira loses 2.6% value as CBN pumps $668.8 million Into FX market in March

“Subsequent phases of FCMB Group’s capital programme are in progress to ensure First City Monument Bank Limited meets the minimum capital requirement to retain its International Banking License.

“The capital injection has enabled First City Monument Bank Ltd. to secure its National Banking License and raise its capital adequacy ratio to 18 per cent.

“This has created essential buffers to support asset creation in select segments.”

FCMB considers selling Stakes in subsidiaries

Legit.ng reported that to meet the goal of raising core capital (excluding equity) for its banking business to at least half a trillion naira by March 2026, FCMB Group, the owners of First City Monument Bank, may consider reducing its stake in subsidiaries.

Premium Times reported that the board of directors may soon call a meeting to ask shareholders to approve a plan by the lender to sell some of its stakes in subsidiaries to prospective investors in exchange for cash.

Read also

Nigeria’s debt hits historic high as FG seeks new World Bank loan

If that path is taken, the deal's proceeds might assist the lender in fulfilling the increased capital requirements.

Source: Legit.ng