FCMB tops Q4 profit estimate as lender cuts impairment charge

FCMB Plc (www.fcmb.com) raised performance bar on its earnings, the group unaudited result shows that lender scorecard improved across key performance metrics.

The group profit for the year which berthed at N17.72 billion translates to about 18.4% increase when compare to N14.971 billion declared in 2018.

Both deposits and loan to customers swelled up to a match, as the banks strived to meet the Central Bank of Nigeria’s 65% target.

In the stock market, the financial service boutique’s strong earnings release lift share price to N1.85 as investors sentiment.

Year to date return is also positive at 1.65% as lender’s market capitalisation surged to N36.635 billion on 19,802,710,754 shares outstanding.

In its fourth quarter of 2019,profit came in stronger than expected. Analysts had developed bearish mood on the back of increased regulatory risk.

Read also: https://dmarketforces.com/fcmb-says-group-will-diversify-earnings-from-retail-raise-tier-2-capital/

But despite the increased regulation, FCMB fourth quarter profit came in at more than 90% year on year increase to N6.928 billion from N3.63 billion in the comparable period in 2018.

Its unaudited result for 2019 shows overall improvement in profit for as lender assets quality improved significantly.

FCMBwas able to reduce its impairment charge on credit losses. As against N14.113 billion booked in 2018, the group achieved massive decline as provision for 2019 reduced 34% year on year.

Then, income from interest yielding assets surged 7.3% from N131.662 billion in 2018 to N141.278 billion.

Related expenses on financing sources moved in similar direction. Interest expenses surged exactly 100 basis points above the level of growth in income.

At 8.30%, interest expenses jerked up from N59.089 billion in 2018 to N63.992 billion.

In the period, harsh operating environment impacted negatively on the operation, pushed the group overhead as inflation rate average 11.4% in 2019.

Personnel expenses grew to N29.588 billion, swelled up by 14.12% from N25.927 billion which was more than 300 basis points above inflation rate.

Compare to 2018, the group net fee income slowed down by about 4% from N21.606 billion to N20.755 billion.

The group total asset expanded more than 24% as it pitched at N1.778 trillion at the end of 2019, its unaudited result shows.

Also, FCMG group customers’ deposits surged to N953.772 billion as against N821.747 billion in 2018.

This was followed by 13.34% increase in loan book. FCMB extended credit to customers from N633.034 billion to N717.533 billion.

FCMB tops Q4 profit estimate as lender cuts impairment charge

Special Report: How FCMB stands: the past, the present and the future

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