FCMB Group Plc’s nine-month performance for the period ending September 30, 2024, showcases robust financial growth and strategic expansion, highlighted by a significant surge in profitability and a strengthened balance sheet. The group reported a profit after tax (PAT) of N82.4 billion, representing a remarkable 68% increase compared to the N49.2 billion recorded during the same period in the previous year. This impressive growth stems primarily from a substantial rise in gross earnings, which reached N587.8 billion, a 67% leap from the N351.5 billion achieved in 2023. Several key factors contributed to this financial success, including robust growth in interest and discount income, improved fee and commission income, effective leverage of investments and trading operations, and a noticeable reduction in impairment losses.
A deeper look into the revenue streams reveals that interest and discount income, a major driver of FCMB’s earnings, experienced an 86% upswing, soaring to N445.8 billion from N239.1 billion. This remarkable growth was further fueled by a 44% increase in net interest income, which reached N173.8 billion compared to N120.5 billion in the previous year. The group’s diversified income streams also contributed significantly to the overall performance. Fee and commission income showed a healthy 24% growth, reaching N51.8 billion compared to N41.5 billion in the corresponding period of 2023. Other income, which includes returns from investments and trading activities, registered a 30% increase, reaching N39.3 billion. The combined impact of these revenue streams solidified FCMB’s robust earnings growth.
The group’s proactive risk management strategy also contributed positively to the financial results. Impairment losses on financial instruments, a measure of potential loan losses, decreased by 22%, dropping to N44.4 billion from N57.0 billion in the previous year. This reduction reflects the effectiveness of FCMB’s risk management practices and its focus on maintaining the quality of its loan portfolio. The combined effect of increased revenue streams and reduced impairment losses significantly boosted the group’s profitability.
Despite operating in a challenging economic environment, FCMB Group continued to invest in its human capital and infrastructure to support its strategic expansion. Personnel expenses increased by 66% to N56.5 billion, aligning with the growth in the workforce required to drive business expansion. General and administrative expenses also rose by 51% to N62.2 billion, primarily due to strategic investments in technology and infrastructure, crucial for enhancing operational efficiency and supporting future growth. These investments, though increasing operating expenses, are considered essential for long-term sustainability and competitiveness.
FCMB Group’s balance sheet further strengthened during the period, reflecting the overall financial health of the institution. Total assets grew by a substantial 54%, reaching N6.8 trillion compared to N4.4 trillion in 2023. This growth was driven primarily by increases in loans and advances to customers and strategic investments in securities. The bank’s equity also witnessed a significant increase of 27%, reaching N588.1 billion. This growth is attributable to retained earnings, which reflect the accumulation of profits, and the successful issuance of Additional Tier 1 capital, a form of regulatory capital that further strengthens the bank’s financial position. These factors collectively underline FCMB’s commitment to maintaining a solid financial foundation.
The benefits of the robust financial performance translated into strong returns for equity holders. Profit attributable to equity holders of the parent company reached N76.9 billion, a notable increase from N47.3 billion in the previous year. This reinforces the group’s commitment to delivering value to its shareholders. The strong earnings growth is also reflected in the basic and diluted earnings per share, which reached N5.55 compared to N3.31 in 2023. This metric provides a clear indication of the profitability generated for each share outstanding, demonstrating the value created for investors. Furthermore, the group successfully raised N150 billion in capital between April and September 2024, demonstrating its proactive approach to strengthening its capital base and supporting its strategic growth initiatives. This successful capital raise further reinforces the market’s confidence in FCMB’s financial strength and growth prospects.
