FCMB had its earnings call today as investors listened in eagerly to hear what CEO Ladi Balogun had to say about the results. The Bank earlier in the year issued a profit warning indicating that results are likely to be bad in 2015. By the time it released its 2015 9 months results, pretax profits had dropped 85% to N2.5 billion. For shareholders of FCMB the following highlights of the earnings call are poignant.
- FCMB is currently exposed to the oil and gas industry to the tune of N98.8 billion
- They are also exposed to the power sector with about N22.8 billion
- The TSA policy initiated by the federal government accounted for the decline in deposit volume and then led to drop in deposit rates further leading to depositors pulling out their funds.
- 37% of all credits are still issued to individuals & SMEs (i.e. Retail). 4.2% growth in loan book YoY is skewed towards Retail (N28.3bn growth)
- 37% of all loans are still issued to individuals & SMEs (i.e. Retail). 4.2% growth in loan book YoY is skewed towards Retail (N28.3bn growth)
- The Spike in overall loan loss charges came from the “Oil & Gas- Downstream” book, and was due to one customer (Capital Oil)
- The bank also said it had it had restructured loans to the oil and gas industry totalling $252 million at the end of September and is in the process of restructuring two more loans with a combined value of $132 million.
- FCMB says there has been a write back on consumer loans in the final three months of last year after delayed salaries of most government workers were at last paid.
- Finally, FCMB says it does not see any need to raise new equity however it is unlikely that they will pay dividends.