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FCMB: Braving the odds to deliver value

The bank’s management is not letting the asset quality strain to impede the impressive growth record of the bottom line.

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First City Monument Bank Ltd issues N20 billion commercial paper

Owing to the rising default in loan repayment forced by the Covid-19 pandemic and the declining economy that affected borrowers’ revenue inflow, First City Monument Bank (FCMB) faced an upsurge in credit loss expenses in the third quarter but its management waded through the strain and maintained the elevated profit performance it demonstrated at half-year. The situation which affected lenders globally also forced the bank’s net loan impairment expenses to rise to N5.6 billion quarter-on-quarter in the third quarter ended in September 2020. This pushed up the year-to-date loan loss expenses to more than N13 billion, jerking up the year-on-year rise from 41 per cent at half-year to over 70 per cent at the end of the period.

The resumption of new lending in 2019 after two years of break, occasioned by the Loan to Deposit Ratio (LDR) policy of the Central Bank of Nigeria (CBN), appears to be fueling the rising asset losses. Last year, the bank grew the customer credit portfolio by 13 per cent and further growth of close to 11 per cent had happened at the end of the third quarter to N793 billion. The bank’s management is not letting the asset quality strain to impede the impressive growth record of the bottom line. Instead, it gained speed on profit growth from the half-year position to 30 per cent year-on-year at the end of the third quarter. FCMB is maintaining the path of growing profit for the third consecutive year though it has remained well below the peak profit figure of N22 billion attained as far back as 2014.

The bank maintained its earnings growth levers on the upbeat, spurred by a step up in interest earnings from 8 per cent growth at half year to 10 per cent increase year-on-year to N112 billion at the end of the third quarter. This was punctured by non-interest income, which shrank from 13 per cent increase at half-year to close flat at N34 billion at the end of September 2020.

Nevertheless, FCMB is still seeing the highest growth rate in revenue in four years in the current financial year. Interest income is growing at the highest rate in for the bank since 2014. At over N146 billion at the end of the third quarter, gross earnings improved by 7.8 per cent year-on-year, slowing down from over 9 per cent improvement at half-year. This remains the best revenue growth record for the bank in four years against a slight decline in 2019.

Interest cost extended its benign behaviour in the third quarter with a year-on-year decline stepping up from 3 per cent at half-year to roughly 4 per cent to close at N44 billion at the end of the third quarter. Improving interest income with declining in interest expenses are the favourable combination for FCMB in 2020. The share of interest income devoted to interest expenses went down from 45 per cent to 39 per cent over the review period. The positive effect is a top record growth of 21 per cent in net interest income to N66 billion at the end of the third quarter compared to less than 5 per cent improvement at the end of 2019.

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The major increase in impairment loss on financial assets however did not let all the increase in net interest income get down into profit. Net loan impairment expenses rose by 70 per cent to over N13 billion at the end of September 2020. The expenses claimed nearly 20 per cent of net interest income against 14 per cent in the same period last year.

With the strength of improving revenue and declining interest expenses, FCMB was able to dilute the impact of rising credit loss expenses and still add some momentum to the bottom line. The bank closed the third quarter with an after-tax profit of roughly N14 billion, which is a year-on-year growth of 30 per cent – stepping up from 29 per cent record at half-year. Profit is accelerating this year from 16 per cent growth the bank recorded at the end of 2019. The ability to grow profit more than three times ahead of revenue underscores a gain in profit margin this year. Net profit margin improved from 7.9 per cent in the same period last year to 9.5 per cent at the end of the third quarter. This is the highest net profit margin the bank has seen since 2015. The strength came from cost saving from interest expenses and a moderated operating cost during the review period.

The improvement in interest income reflects the expansion of earning assets with loans and advances growing by N77 billion over the 2019 closing figure of N715 billion and investments rising by N64 billion to over N303 billion over the same period. Over the nine months of the year, it has grown the size of the balance sheet by N369 billion or 22 per cent to close at over N2 trillion – the strongest growth since 2012. Earnings per share amounted to 70 kobo at the end of the third quarter operations, improving from 54 kobo per share in the same period last year.

The Bank remains on track with our full-year expectation that it would retain the key strengths of growing revenue, moderating interest expenses and improving profit margin and stay the course of rebuilding profit for the third straight year in 2020.

NM Partners represent articles published in paid partnerships with corporate organisations. They include press releases, targeted content, and other forms of corporate communications on behalf of our Paid Partners.

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Glo propels growth in telecoms sector in Q3, 2020

Globacom’s remarkable performance in the sector is believed to be a result of the continuing network upgrade…

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Data War: MTN gains 8.18 million subscribers in 2019, as Airtel edges Glo, 9mobile

Data grandmasters, Globacom, drove the growth in Nigeria’s telecommunications industry in the third quarter of 2020, according to data released by the National Bureau of Statistics (NBS).

The data showed that the sector grew substantially in the quarter propelled by data subscriptions which rose by 23 percent year on year to stand at 151,063,413 million subscribers at the end of September 2020. The figure for the corresponding period of 2019 was 122,792,291.

While Globacom recorded a 33.2 percent growth in its internet subscriber base between September 2019, and September 2020, MTN which came second had a growth percentage of 24.5 during the same period. Airtel, on its part, recorded 21.4% growth year on year. On the other hand, the NBS report showed that the fourth operator, 9mobile, witnessed a decline during the period under review. The network suffered a 14% slide in its internet subscriber figures between September 2019, and September 2020.

Glo data services are powered by the huge capacity international submarine cable called Glo-1, a wholly-owned facility that brought unprecedented bandwidth from Europe to Nigeria and other West African countries.

Globacom’s remarkable performance in the sector is believed to be a result of the continuing network upgrade which has enhanced data service delivery to its subscribers. Company sources say Globacom is also continuing the extension of its massive fibre routes pan Nigeria at an accelerated pace so as to further improve broadband penetration and the range of Glo 4G+ data services to all parts of the country.

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In addition to this, Globacom offers subscribers attractive data packages with unmatched value. For instance, 7GB goes for only N1500, while N10,000 gives the subscriber 50GB. It also has the Mega Data plans meant for Home Broadband users such as Small Office Home Office (SOHO) and SME customers as well as high-end customers who have the need for higher data benefits with longer validity periods. Apart from these, Globacom also has numerous social data plans which meet every customer’s social needs.

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Fidelity Bank hosts National Capacity Building webinar for SMEs

…Maiden Enugu edition to empower entrepreneurs. 

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Fidelity Bank Plc, top Nigerian lender, is set to organise a National Capacity Building Webinar For Small Medium Enterprises (SMEs) in the country. The programme is part of deliberate efforts to assist entrepreneurs across all sectors of the Nigerian economy develop requisite capacity to unlock their full potentials and take their businesses to the next level of growth.

Targeted specifically at existing businesses operating in critical sectors of the economy including trade and commerce, manufacturing, hospitability, education, entertainment, transportation and agriculture, these virtual sessions will take place across the country on a state-by-state basis, with the maiden edition slated for Enugu State on January 27, 2021 by 10am.

The Enugu event is organised in collaboration with the Enugu State Ministry of Trade and Commerce and the Enugu SME Centre; Small and Medium Enterprises Development Agency of Nigeria (SMEDAN); Nigeria Association of Small & Medium Enterprises (NASME) and Enugu Chamber of Commerce, Industry, Mines and Agriculture (ECCIMA).

Themed “Funding and Financial Management”, the Enugu Edition will have in attendance special guests including Mrs. Monica Ugwuanyi, First Lady, Enugu State, Sir Robert O. Anwatu, Managing Director/Chief Executive Officer, Roban Stores, and Mr. Chiedozie Atuegwu, Director, Michelle Laboratories Limited.

Other discussants billed to participate in the webinar are subject matter experts with respect to funding and financial management for SMEs as well as model entrepreneurs who will share their success stories with participants.

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As a financial brand unswerving in its quest to develop the Nigerian economy, the SME Webinar seeks to help the participating MSMEs grow their businesses by educating them on the best measures to take in managing their finances, improving their sales, and developing their business in general.

Speaking on the event, Fidelity Bank CEO, Mrs. Nneka Onyeali-Ikpe said, “The programme underscores our long-running support for the growth of small businesses which stems from our recognition of MSMEs as critical agents of economic development and transformation in Nigeria and the world at large.

According to Onyeali-Ikpe, the session aims at providing practical information, skills, and resources to help entrepreneurs become better managers of their businesses. The Bank has embarked on virtual SME-based events, to adhere to the social distancing guideline essential to promoting the safety of every participant in view of the COVID-19 pandemic.

Interested participants are required to click – https://www.fidelitybank.ng/SME-Capacity-Building/ – to register.

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Stanbic IBTC reiterates commitment to the growth of Education in Nigeria

Stanbic IBTC leverages technological innovations to facilitate the provision of quality education in Nigeria.

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In commemoration of the 2021 International Day of Education, Stanbic IBTC Holdings PLC, a member of Standard Bank Group, reaffirmed its commitment to providing support and ensuring accessible education to the Nigerian child.

The United Nations (UN) proclaimed 24 January as the International Day of Education, in recognition of the impact of education in bringing sustainable development across the world. The 2021 International Day of Education is themed: “Recover and Revitalise Education for the COVID-19 Generation.”

Speaking on the relevance of the celebration to Stanbic IBTC, Wole Adeniyi, Chief Executive, Stanbic IBTC Bank PLC stated: “Our organisation is keen on positively impacting the education sector to drive national development.”

Adeniyi noted that eucation serves as one of the core pillars of Stanbic IBTC’s CSI initiatives. He emphasised that the end-to-end financial institution would continue to show its unrelenting support towards growth in the Nigerian educational system.

According to him, “we embark on several initiatives aimed at improving education for the Nigerian child, even in the heat of the COVID-19 pandemic when many students struggled to keep up with learning during the nationwide lockdown.”

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Stating some of the giant strides taken by Stanbic IBTC to promote effective learning amid COVID-19 disruptions, Adeniyi highlighted that the company had been actively involved in empowering the younger generation with financial literacy knowledge through its “New School Money Initiative”.

Wealth certified professionals in the organisation educated preteens and teenagers on how to develop a savings and investment culture through virtual sessions. They shed more light on subjects to distinguish between wants and needs, assets and liabilities, and the importance of making the right financial decisions. These were effectively communicated using simple, relatable videos and illustrations.

Referencing the International Day of Education theme, Adeniyi further stated that Stanbic IBTC leverages technological innovations to facilitate the provision of quality education in Nigeria.

“Through our CSI initiative, we prioritise the refurbishment of dilapidated schools to create a more conducive environment for our children to learn. We support teachers with better welfare and provide e-libraries, books, computers and other digital tools to aid effective learning for students,” he said.

Stanbic IBTC has also continued to demonstrate its commitment to the development of education in Nigeria through its various educational products to secure the future of young Nigerians. Some of the products include the Children Educational Savings Scheme Account (CHESS), Stanbic IBTC Education Trust (SET) investment scheme and BluEdge, which offer bespoke financial solutions that support Nigerian parents and guardians with various funding options for their children and wards. In the same vein, the leading end-to-end financial institution empowers young Nigerians to access quality education through its JAMB Scholarship Scheme.

“The celebration of the International Day of Education is an opportunity to reiterate our commitment to the growth of education in Nigeria. At Stanbic IBTC, we understand the importance of education in shaping the future of the nation, and we are committed to providing opportunities that guarantee access to quality education for every Nigerian child,” Adeniyi concluded.

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