FCMB Group’s annual profit drops 21% despite higher revenue

Net profit at the banking holding company FCMB Group fell by more than one-fifth last year amid galloping cost pressures even though revenue grew by as much as 53.9 per cent.

These details are contained in the group’s newly released audited earnings report.

The result bucks the trend of record profitmaking by the majority of Nigerian lenders that have so far published their financial statements for 2024 as a dramatic rise in the benchmark interest rate during the year sharply boosted the income banks earned from granting loans.

Gross earnings for FCMB Group climbed to N794.4 billion from N516.4 billion, with interest and discount income alone contributing almost four-fifths.

Even though interest income expanded by 75.2 per cent to N621.8 billion, the chunk of that was eroded by interest expense as the cost the financial services group incurred from keeping the deposits of savers jumped more than twofold.

Net interest income grew by 27.6 per cent during the period, compared to 44.8 per cent a year ago.

Boosting revenue, net trading income increased almost six times to N53.8 billion, riding on the back of much-improved returns from the group’s investment in FGN bonds.

A major pressure point on profit was operating expenditure, which soared by 45.7 per cent, the key drivers being higher personnel costs, regulatory costs, foreign currency-linked expenses as well as inflation.

Likewise, other gains fell to N39.6 billion from N89.3 billion following a slump in foreign exchange gains. Cost-to-income ratio was as high as 59.9 per cent for the year.

First City Monument Bank, the mid-tier commercial banking division of the group, is in the process of shoring up its core capital to a minimum of N500 billion before a March 2026 deadline set by the Central Bank of Nigeria for lenders in that category.

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Last December, the group said it raised N147.5 billion from a public offer, lifting the paid-up share capital and share premium of the banking subsidiary to over N240 billion.

“Subsequent phases of FCMB Group’s capital programme, which are currently underway, are aimed at ensuring First City Monument Bank Limited meets the minimum capital requirement to retain its International Banking License,” it said in a statement on Thursday.

Pre-tax profit for the period under review advanced by 7.1 per cent, while profit after tax declined to N73.3 billion from N93 billion.

For the financial years 2023 and 2024, the group incurred N17.7 billion from the windfall tax imposed by the Nigerian Government as 70 per cent of banks’ realised gains from foreign exchange transactions. Total assets stood at N7.1 trillion, up from N4.4 trillion.

Aside commercial banking, FCMB Group’s operations span asset management, pensions, micro-lending, brokerage and trusteeship.