FCMB Group Plc 9M’19 – Earnings falter, kept afloat by non-recurring reversals

Must Read

TAJBank Launches Nigeria’s 2nd Non-Interest Financial Institution (Photos)

Abuja Nigeria   December 2nd 2019, TAJBank, Nigeria’s second Non –Interest financial institution, has announced the launch of its services...

List of Guaranty Trust Bank Sort Codes & Branches (with addresses) in Nigeria

The sort code is a number which usually identifies both the bank and the branch where an account is...

Dr. Olugbodi Clinches Brand Leadership Award

In recognition of his giant strides and outstanding performance in the Integrated Marketing Communication industry, the Executive Vice Chairman...
- Advertisement -
CardinalStone Research 
FCMB Group Plc (FCMB: TP 1.80 – HOLD) reported a 5.3% YoY decline in EPS to N0.54 for 9M’19 in its latest filing with the Nigerian Stock Exchange (NSE). The decline in earnings reflected significantly lower FX gains amidst a 19.3% YoY jump in personnel expenses.
Some highlights:
  • Interest income weakened during the quarter (-12.6% QoQ), dragged by a slump in interest earnings from loans and advances (-21.4% QoQ). Although FCMB slightly grew loans (+1.5% QoQ) during the quarter, the bulk of the growth likely came in the latter part of the quarter on CBN’s push on the LDR front. This likely explains the muted transmission of the growth in loans to interest income.
  • Non-interest income came in strongly during the quarter (+60.5% QoQ to N12.3 billion), largely bolstered by reversal of c.N4.8 billion relating to provisions for litigation deemed no longer necessary. Other components of fee income were relatively flat QoQ.
  • Adjusting for the impact of the N4.8 billion litigation-related reversal, which we believe is non-recurring, FCMB would have made a loss of c. N1.5 billion in Q3’19. This is concerning, in our view.
  • Operating expenses increased by 17.8% QoQ, causing a 6.7ppts QoQ rise in cost to income ratio to 78.8%. Adjusting for the non-recurring litigation-related reversal, effective cost to income ratio increases to 93.9% in Q3’19.
  • As at September 2019, FCMB’s loan to funding ratio was 57.4%, lower than CBN’s initial guideline of 60.0%. However, we note that NPL and Capital adequacy ratios of 3.5% and 18.0, respectively, are well within the regulatory limits.
Read:  Yes, it's a KFC phone
- Advertisement -
Read:  AVERAGE INTERCITY TRANSPORT FARE INCREASES TO N177.57 IN FEBRUARY 2019 FROM N175.07 IN JANUARY 2019

FCMB Group Plc 9M'19 - Earnings falter, kept afloat by non-recurring reversals FCMB Group Plc 9M'19 - Earnings falter, kept afloat by non-recurring reversals

Please click here for the full result.

- Advertisement -

Subscribe to BrandSpur Ng

Subscribe for latest updates. Signup to best of brands and business news, informed analysis and opinions among others that can propel you, your business or brand to greater heights.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Latest News

2019 Review & 2020 Outlook – LBS Executive Breakfast Session (December 2019)

Nigeria – No longer a smugglers paradise The Jury is out as to whether the present border closure in Nigeria...

Inflation, Rolling with the Punches “Border closure, Lower interest rates…”

Based on our survey, headline inflation for November is projected to increase to 11.88% from 11.61% in October. In the last six months, headline...

Fenix Benin (ENGIE) Connects 40,000 Households to Solar Power in Just One Year

Next-generation energy company Fenix International, a subsidiary of ENGIE, has surpassed its previous rapid growth rates and connected 40,000 households to solar power in...

African Development Bank’s digital skills training benefits women

After graduating from the University of Ibadan in Nigeria with a degree in Communication and Language Arts in 2016, Olashile Odetola could not find...

More Articles Like This