Investors Laud FCMB’s 2013 Performance, Okay N5.94b Dividend

Shareholders of FCMB Group Plc have unanimously commended the financial institution for it performance in 2013. The investors also approved the payment of a cash dividend of 30 kobo per ordinary share, for the year ended December 31, 2013. This translates to a total amount of N5.94billion.

The decision was reached at the first Annual General Meeting, AGM, of FCMB Group Plc, which was held in Lagos on Friday, June 6, 2014.

Coordinator of Independent Shareholders Association of Nigeria, ISAN, Sir Sunny Nwosu, while commenting on the development and the financial statements of the Group, applauded the Board and Management of FCMB Group Plc for improving FCMB’s profitability over 2012, despite the particularly challenging operating environment for banks in 2013.

“The resumption of good dividend payment is proof that FCMB’s management team is successfully executing its strategy and leveraging the recent transformation into a financial holding entity, to drive significant value creation for shareholders,” Nwosu declared.

Also speaking at the AGM, Chairman of FCMB Group, Dr Jonathan Long, pointed out that the Group, which comprises First City Monument Bank Limited, FCMB Capital Markets Limited and CSL Stockbrokers Limited, “has recovered strongly over the past two years and in 2013 made sufficiently strong progress.” He attributed this to the implementation of initiatives that have improved efficiency and the successful integration of FinBank, which has boosted FCMB in retail banking.

Long added that, “the intention to pay dividend signifies the desire of the Board to reward the Group’s shareholders for their continued commitment and support.”

On his part, the National Chairman of Shareholders’ Trustees Association of Nigeria, Alhaji Mukhtar Mukhtar, expressed delight on the payment of dividend. He urged the management and Board of FCMB to continue to improve customer experience at every customer interface and invest in key sectors of the economy, as these will improve profitability and ability to pay even more dividends next year.

Managing Director of FCMB Group Plc, Peter Obaseki, noted that, “the Group is on track to deliver on its promise to its various shareholders.”

He continued by explaining that the Financial Holding Company structure, “enables us deliver more consistently and sustainably. As we look ahead to the future, we will continue to enhance the contribution of the non-bank subsidiaries to the Group through deepening market penetration in each of our business lines, investments in other growing sub-sectors of financial services, while driving cross-sell and synergy realisation across the Group.

“We believe that our approach of revenue maximization, underscored by our implementation of a robust risk management practice will enhance shareholder value in the medium to long term.”

Also speaking, the Group Managing Director/Chief Executive of First City Monument Bank Limited, Ladi Balogun, pointed out that the Bank delivered improved financial performance, in spite of the challenging regulatory environment, due to the high liquidity levels it maintained and its growing focus on retail banking.

Balogun disclosed that the Bank’s primary goals in the next three years are to, “ensure that we can achieve a return on equity of over 20% and a cost-to-income ratio below 55%.”

The GMD/CEO also assured that “the Bank will continue to accelerate development of its retail franchise, increase its customer base to 4 million by 2016 and show growth in retail loans. There will also be a heightened focus on customer experience, while simultaneously defending our corporate and investment banking market share and shifting most of our customer transaction to alternative channels.”

The audited accounts of FCMB Group for the year ended December 31, 2013 showed a profit before tax (PBT) of N18.2billion, up 12% from the previous year.  The Group also reported improved earnings growth in 2013.

Net revenue rose 16% to N84.2billion over prior year. Moreover, the significant developments in key operating areas also impacted on deposits as this grew by 11% to N715 billion, aided by 21.1% growth in current and savings accounts, while fixed deposits declined during the year.

Consequently, the bank’s funding mix has improved, with current and savings accounts now accounting for 73.9% of total deposits, which saw a reduction in the bank’s cost of funds during the year in spite of the fact that interest rates remained high throughout 2013. Loans and advances also grew 26% to N451billion with total assets (excluding contingencies) standing at over N1trillion.

FCMB Limited, the banking subsidiary of the Group, also sustained the soundness of its balance sheet and credit standing.  Going by the 2013 financial statements, the Bank exhibited abundant liquidity (liquidity ratio of 47%) and robust capital base (capital adequacy ratio of 18%), that protects against downside risks and supports future business growth without immediate need for capital raising.

As a demonstration of FCMB Group’s strength, it built on the momentum of last year’s performance into this year as the result for the first quarter ended March 31, 2014 showed a profit before tax (PBT) of N5.6 billion, up 15% from N4.8 billion for the same period in 2013.

Net revenue also rose 16% to N22.3 billion over prior year, deposits was up 9% year-on-year to N687.3 billion, while loans and advances increased 50% year-on-year to N493.7billion.

Analysts are of the opinion that the Financial Holding Company structure adopted by FCMB, will continue to enhance its competitiveness, improve enterprise-wide risk management and enhance synergy across the Group.