FCMB Group Plc to Boost Earnings through Diversification

Goddy Egene

The Group Chief Executive of FCMB Group Plc, Mr. Ladi Balogun has said its diversification strategy would boost its earnings and deliver high returns to shareholders. Balogun stated this at the fifth annual general meeting (AGM) of the company in Lagos.

According to him, the successful acquisition of majority (88.2 per cent) stake in Legacy Pension Managers Limited will go a long way to help achieve further diversification of service offerings and consequent earnings within the FCMB Group.

He said: “We see significant growth opportunities in the Pension management industry in Nigeria as it is yet to achieve maturity and will support and facilitate strategic organic and inorganic growth initiatives that will position Legacy in the top-tier of its industry over the next few years.’’

Speaking on the performance of First City Monument Bank Limited, the commercial and retail banking member of FCMB Group Plc, Balogun said: “It showed signs of improvement with growth in income levels (after adjusting for exceptional FX revaluation income in 2016), reduction in impairment charges and substantial growth in our UK business and consumer finance business (CDL), after a difficult 2016. Commercial and retail banking remains our largest group, contributing 76.2 per cent of profits and 98.5 per cent of total assets.’’

He disclosed that the investment banking arm exhibited improved performance, from a loss position in 2016 of N84.0million after tax to a profit of N430.3million after tax in 2017, largely driven by CSL Stockbrokers Limited.

“Our stockbroking business remains a top-three player in its sector and participated as the sell-side broker on the largest ever trade on the Nigeria Stock Exchange in December 2017. CSLS Stockbrokers Limited and FCMB Capital Markets Limited jointly accounted for 4.1 per cent of profits,’’ he said.

In his address, Chairman of FCMB Group Plc, Mr. Oladipupo Jadesimi said the company recorded a gross revenue of N169.9 billion and a profit before tax (PBT) of N11.5billion, while profit after tax (PAT) was N9.4billion.

According to him, deposits grew to N689.9billion as at the end of December 2017, an increase of five per cent, from N657.6billion in the previous year, while capital adequacy ratio improved to 16.9 per cent from 16.7 per cent, just as asset base increased to N1.19trillion, compared to N1.17trillion at the end of 2016.

“FCMB Group Plc was on a stronger pedestal and would continue to provide superior performance that would add significant value to stakeholders in a sustainable manner in spite of the challenging macroeconomic and regulatory environments. We will continue to shore up the capital of the bank through profit retention in preparation for the growth opportunities that we expect as the economy recovers,” Jadesimi added.