Business
FCMB fails to drive growth with N144.6bn capitalisation proceeds
…as profit declines to N73bn
The First City Monument Bank (FCMB) Group has disclosed that the N144.6billion funds it raised through its recent public offer had little impact on its earnings for the 2024 financial performance.
This revelation was made known in the bank’s audited accounts and earnings report for the period filed with the Nigerian Exchange Limited (NGX) on Friday.
While the group’s profit before tax saw a modest increase of 7.1 per cent to N111.9billion, profit after tax declined to N73.34billion from N90.02billion in 2023.
In its earnings report, FCMB stated that the capital raised in FY 2024 had a limited immediate impact on earnings due to the timing of regulatory approvals (completed in December 2024).
It, however, said it will be a key driver of profitability in FY 2025.
“Three strategic initiatives will support the banking group’s earnings growth: optimising net interest margins through a stronger capital position.
“Expanding digitally enabled payments and collections solutions to achieve a low-cost deposit funding ratio of 80 per cent and deepening our presence in the premium retail and institutional banking segments”.
In line with the Central Bank of Nigeria’s recapitalisation directive, the group successfully completed the first phase of its capital raising programme, raising N144.6billion through a public offer, which led to an increase in issued shares from 19.8 billion in 2023 to 39.6 billion in 2024.
The FCMB Group revealed that the subsequent phases of its capital programme are aimed at ensuring that First City Monument Bank Limited meets the minimum capital requirement to retain its international banking licence.
The capital injection into the banking subsidiary has enabled First City Monument Bank Limited to not only secure its national banking licence but also raise its capital adequacy ratio to 18 per cent, creating necessary buffers to support asset creation in select segments.
Meanwhile, the group recorded a gross revenue of N794.4billion for the period ending December 2024, a 53.9 per cent growth from N516.4billion in the prior year.
The group added that its earnings continued to be diversified in the period under review, with non-bank subsidiaries accounting for over 30 per cent of profits.
Contributions by other divisions include: Banking Group: 69.5 per cent; Consumer Finance: 11.0 per cent; Investment Management: 5.8 per cent and Investment Banking: 1.6 per cent.
The growth in gross earnings was driven by a 75.2 per cent growth in interest income and an 8.7 per cent growth in non-interest income.
The rate of growth in non-interest income was impacted by a 55.7 per cent year-on-year decline in other gains from N89.3billion to N39.6billion. Net interest income grew by 27.6 per cent from N176.6billion in the prior year to N225.3billion at the end of December 2024.
Operating expenses grew by 45.7 per cent to N229.1billion in 2024 due to increased personnel costs, regulatory costs, foreign currency-linked expenses (technology and foreign subsidiary expenses e.t.c) and general inflationary pressures.
