FCMB Group Plc, a Nigerian lender, has succumbed to a weak naira and a drop in oil price as earnings faltered
For the first three months through March 2016, the bank’s net income reduced by 68.88 percent to N1.64 billion as against N5.27 billion as at March 2015. Revenue otherwise known as interest income was down by 11.68 percent to N28.50 billion on the back of reduced interest income on loans and advances.
The Managing Director and Chief Executive Officer of the FCMB, Ladi Balogun had said the foreign exchange restriction imposed by the Central Bank of Nigeria will hurt the profit of lenders.
FCMB was one of the banks that issued a profit warning earlier this year after the lender confirmed that loans to the oil and gas sectors had to be provisioned. The share price has dropped by over 70% in the last year and only recorded modest gains after the lender surprised investors that it will pay dividends.
This results is another bombshell for shareholders who are likely to be in for another difficult second quarter. It is not unlikely that the worst is over as more credit worries could lead to further impairments.
