FCMB's Market Value Steadies Despite Earnings Beat

FCMB Group’s market valuation was steadied at about N135.65 billion, data from the Nigerian Exchange showed with a unit price of N6.85 after losing 10k during the trading session last week.

Its share price has not adjusted reasonably despite a remarkable earnings growth posted in the third quarter of 2023. Detail from its regulatory filing excludes information about the shareholding structure or free float position.

The financial services group grew profit by 114.45% year on year to N49.152 billion at the end of nine months of financial year 2023, from N22.92 billion in the comparable period.

In the latest regulatory filing, the bank said the Board considered and approved the financial year 2024 budget of the company at its Board of Directors’ meeting held on Friday, December 1, 2023. 

In the latter of November, FCMB Plc released its Q3’2023 unaudited financial statement with an uptrend across the top and bottom lines.

Its financial scorecard for the nine months reveals a substantial improvement in gross revenue, escalating by 75.7% to ₦351.5 billion from ₦200.1 billion in the corresponding period of the prior year.

Analysts said the notable growth results from a 55.1% surge in interest income and an impressive 144.6% expansion in non-interest income, according to Apel Asset Limited update.

The results showed that the bank’s net interest income increased by 29.5%, advancing from ₦93.1 billion in the previous year to ₦120.5 billion. Analysts said this positive trajectory was a result of improvements in the yield on earning assets during the September 2023 period.

Other revenue recorded a significant increase of 3055% to ₦61.5 billion from ₦1.9 billion recorded in the previous year due to the dividend received from unquoted equity securities held for strategic purposes.

The group’s other revenue line was also boosted by foreign currency revaluation gain realized from the revaluation of foreign currency-denominated assets and liabilities held in the non-trading books.

Operating expenses advanced by 29.0%, reaching ₦111.5 billion amidst the accelerating inflation rate in Nigeria. Analysts said the upsurge was driven by heightened personnel costs, regulatory expenses, technology-related expenditures, and general inflationary pressures.

The net impairment loss on financial assets rose to ₦57.0 billion for the period ending September 2023, compared to ₦18.7 billion in the previous year. Consequently, the cost of risk increased to 3.9%.

FCMB’s pretax profit exhibited a remarkable growth of 108.0%, reaching ₦55.1 billion. Various divisions within the Group contributed to this robust earnings growth, with the Banking Group leading at 130.1%, followed by Consumer Finance at 32.6%, Investment Management at 38.7%, and Investment Banking at 27.6%.

#FCMB’s Market Value Steadies Despite Earnings Beat Naira Devaluation Deepens Economic Crisis in Nigeria