FCMB 2015 FY RESULTS

Income statement (N‘ million)*
FY 15 FY 14 YoY growth % of FY 15E forecasts Q4 15 Q3 15 QoQ
Gross Earnings 152,508 148,637 2.6% 107% 43,214 31,941 35.3%  
Net interest income 63,937 72,634 -12.0% 92% 15,227 14,274 6.7%  
Non-interest revenue 25,760 28,185 -8.6% 96% 6,131 7,099 -13.6%  
Operating expenses (66,979) (66,304) 1.0% 96% (16,491) (16,835) -2.0%  
Impairment charges (15,033) (10,640) 41.3% 74% 254 (11,540) N/A  
PBT 7,768 23,943 -67.6% 127% 5,206 (7,003) N/A  
PAT 4,761 22,133 -78.5% 97% 2,895 (6,435) N/A  
EPS 0.24 1.12 -78.5% 97% 0.15 (0.32) N/A  
Source: Company data *unless otherwise stated

 

Balance Sheet (N’ million)*

 

FY 15 FY 14 YoY growth % of FY 15E forecasts 9M 15 QoQ
Loans 592,957 617,980 -4.0% 103% 568,496 4.3%
Total Assets 1,159,534 1,169,365 -0.8% 100% 1,171,349 -1.0%
Deposis 700,217 733,797 -4.6% 98% 703,227 -0.4%
Total liabilities 997,143 1,008,999 -1.2% 100% 1,012,991 -1.6%
Net Assets 162,391 160,365 1.3% 98% 158,358 2.5%
BVPS 8.20 8.10 1.3% 98% 8.00 2.5%
Source: Company data *unless otherwise stated

 

Other News

Key ratios
FY 15 FY 14 change (pps) Q4 15 Q3 15 change (pps)
Asset Yields 13.0% 13.7% -0.7 13.3% 8.7% 4.6
WACF 6.7% 5.5% 1.2 9.4% 4.2% 5.2
Net interest margins 6.7% 8.4% -1.7 6.4% 5.9% 0.5
Cost-income ratio 74.7% 65.8% 8.9 77.2% 78.8% -1.6
Cost of risk 2.6% 1.7% 0.8 -0.2% 8.1% N/A
PBT margins 5.1% 16.1% -11.0 12.0% N/A N/A
PAT margins 3.1% 14.9% -11.8 6.7% N/A N/A
Effective tax rates 38.7% 7.6% 31.2 44.4% 8.1% 36.3
ROE 4.8% 14.6% -9.7
ROA 0.4% 2.0% -1.6
CAR 16.9% 19.3% -2.4
Source: Company data

 

Commentary

·         First City Monument Bank Group Plc. (FCMB) released audited FY 2015 results, wherein gross earnings rose 2.6% YoY (9M: +2.4%) to N152.5 billion while PBT and PAT climbed 68% (9M: -85%) and 79% higher (9M: -87%) YoY to N7.8 billion and N4.8 billion respectively.

·         In addition, FCMB announced a dividend of N0.10 per share (FY 15E: N0.05, FY 14), which translates to ~12.5% dividend yield at current pricing.

·         A quick read through Q4 15 numbers show a recovery from the impairment hit Q3 15, when the bank booked an N11.5billion write-down largely on legacy downstream O&G loans, with FCMB recording recoveries of N254 million over the quarter.

·         The benign trend in loan loss provisioning line masked a spike in Q4 15 interest expense (despite commencement of monetary policy easing in Q4 15) with annualized WACF jumping 520bps QoQ to 9.4%.

·         FCMB trades at a current P/E and P/B of 3.3x and 0.1x respectively which are both at discount to peer averages. Relative to last trading price of N0.8, our FVE at N1.84 implies a BUY rating.

·         More analysis to follow.

·         Conference call details to follow.