FCMB Group Plc recorded considerable growths in the top-line and profitability in the third quarter as the financial services group grew net profit by 119.9 per cent to N12.026 billion in nine months.
Key extracts of the nine-month report for the period ended September 30, 2018 showed that group gross earnings rose by 11.8 per cent to N132.875 billion in September 2018 as against N118.816 billion by September 2017. Interest income declined by 0.9 per cent to N95.417 billion from N26.277 billion, while interest expense also declined by nine per cent to N42.182 billion, as against N46.375 billion achived in 2017.
Non-interest income had increased by 66.2 per cent from N22.540 billion in 2017 to N37.458 billion. This was significantly bolstered by the c.N9.0 billion FX revaluation gains recorded during the review quarter and also supported by the 7.4 per cent quarter-on-quarter growth in net fees and commission income, despite the 69 per cent quarter-on-quarter decline in trading income.
Profit before tax rose by 115.9 per cent from N14.767 billion to N6.841 billion. Profit after tax also increased to N12.026 billion in third quarter 2018 as against N5.469 billion in comparable period of 2017, while earnings per share rose to eight kobo under the period review.
Also, the company’s loans and advances dropped by 7.4 per cent from N649.797 billion to N601.852 billion, deposits rose by 12.7 per cent to N784.599 billion, compared to N696.216 billion in 2017, while net assets fell by 5.3 per cent to N178.942 billion as against N188.968 billion in nine months, 2017.
Analysing the results, analysts at CardinalStone Research highlighted that FCMB’s nine months 2018 result was significantly bloated by the N9.0 billion FX revaluation gain booked in third quarter, 2018. While we expect this to go on to support the bank’s full year, 2018 result, we are cautious in our excitement given that we do not foresee similar lofty numbers beyond full year, 2018.
They added that “more so, we are concerned about the 15.8 per cent year-on-year rise in impairment losses, a contrast to an average decline of 39.7 per cent year-on-year observed across our coverage banks. Based on our last review, our target price for the counter is N2.95 and buy signal still remains.”
FCMB Group includes First City Monument Bank (FCMB) Limited, FCMB Capital Markets Limited, CSL Stockbrokers Limited and CSL Trustees Limited.
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