FCMB Targets N32 billion as Profit in Q1-2025
FCMB Plc has revealed a forecast that show the group is targeting N32 billion as profit for the first quarter of 2025, according to an official filing.
The diversified banking group said in its earnings forecast that revenue will come handy at N226.927 billion in the first three months in 2025.
The group’s net interest income was projected to settle at N95.404 billion next quarters amidst Nigeria’s high interest rate environment.
FCMB Plc bullish estimate is informed by loan repricing after latest adjustment to monetary policy rate.
Its projected N3.47 billion FX gain for the first three months in 2024, which could be threaten by the latest naira exchange rate trend in the forex market.
FCMB forecasted net operating income of about N125 billion for the first three months of operation in 2025, supported by expectation of a bogus transactions commission totaling N18.124 billion.
In 9M-2024 financials, diversified financial services company reported a 68.7% growth in gross earnings to N577.4 billion.
This earnings level was driven by 86.5% growth in interest income line which settled at N445.79 billion.
The amount accounted for 77.2% of group earnings in the period, according to a review note by CardinalStone Securities Limited.
Payment to providers of funds also skyrocketed. Interest expenses increased by 129.4% year on year.
Still, group also achieved a 44.3% growth in net interest income, which eventually settled at N173.80 billion at the end of 9M-2024.
But the sharp rise in interest expenses led to a 60bps contraction in net interest margin, which settled at 7.0%, CardinalStone said.
In the period, the group witnessed a 27.6% year on year growth in non-interest income which settled at N131.59 billion.
The uptick was supported by strong growth in foreign exchange trading income, up by 8.1x to N17.98 billion and FGN bond trading income, up by 1.7x to N27.34 billion, as per CardinalStone.
Reflecting high inflation condition, FCMB operating expenses grew by 51.7% year on year, driven by increases in personnel costs (+66.2%) and IT expenses (+80.2%).
Personal expenses increased by 66.2% year on while spending on IT spiked by 80.2% – both costs drove the group cost to income ratio higher.
FCMB’s cost-to-income ratio rose to 55.4% at the end of 9M-2024 results, from 49.9% 12 months earlier.
Analysts however spotted that the group impairment charges declined by 22.0% to N44.43 billion, providing some relief as asset quality improved.
Net profit was N82.4 billion, up by 67.6% year on year. The group earned N4.2 on each shares deployed for operation, which was significantly higher than N2.5 earned per share in the comparable period in 2023.
Last week, the market price of the stock declined slightly to N9 on Friday on the Nigerian Exchange, from N9.2. #FCMB Targets N32 billion as Profit in Q1-2025#
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