FCMB will shift its focus to better managing its loan book rather than growing aggressively, after 2015 pre-tax profit fell 68 percent, CEO Ladi Balogun told an analysts’ call.
Its pre-tax profit of N7.77 billion ($39.08 million), was down from N23.94 billion a year earlier and followed a profit warning FCMB issued last month citing Nigeria’s tough economic environment.
“We are not going to drive our corporate banking aggressively this year we are holding back to improve the quality of our book,” said Balogun, adding that the bank had tightened its risk criteria.
Balogun, whose tenor as CEO expires next year, said he expected corporate loans to be flat this year as the bank focuses on fee income and price reviews instead to boost its revenues.
The return on equity (ROE) would grow in a single digit percentage figure this year as the bank tries to diversify revenues away from loan growth. The ROE would return to double digit growth by 2017, Balogun said.
The bank expects growth in its retail business to account for around 50 percent of revenues driven through low-cost deposits and transaction fees, while it will close about 23 branches this year to cut costs by around 5 billion naira.
Balogun said the bank intends to continue to reschedule foreign currency loans and issue local currency bonds this year as it expects Nigeria’s economy to remain challenging.