FCMB Group PAT up 209.6% in Q1’24

FCMB Group, a Nigerian tier-2 lender, recently announced a remarkable 209.6 per cent increase in its first-quarter profit after tax. The group also reported a significant year-on-year rise of 104.7 per cent in its gross earnings. Deji Fayose, the Chief Financial Officer at FCMB Group, joined CNBC Africa to discuss the drivers behind this exceptional performance and the capital raise plans. The group's success in Q1 was fueled by a substantial growth in both interest income and non-interest income of 62% and 154% respectively. This strong momentum carried over from the previous year, with the profit before tax in 2023 increasing by 183%. The group closed the year with approximately $104.4 billion in profit before tax. In Q1, the profit before tax reached 31.3 billion, driven by a 90% growth in interest income and a 151% increase in non-interest income. Fayose attributed this success to FCMB's ecosystem strategy, where all operating companies within the group work together seamlessly to achieve common goals. Navigating the challenging operating environment has been a key focus for FCMB Group. Despite the headwinds posed by the Central Bank of Nigeria's reforms, Fayose remains optimistic about the positive impact of these reforms in the long run. He highlighted that FCMB operates across four verticals, including traditional banking, consumer finance, investment banking, and investment management. This unique structure allows the group to cross-sell products and services, ultimately reducing costs and operating expenses. Regarding the recent recapitalisation exercise mandated by the CBN, FCMB Group is proactively working towards raising 150 billion Naira in additional funds. This initiative aligns with the group's ongoing efforts to strengthen its capital base. Fayose emphasized that capital has always been a critical success factor for FCMB, and the focus is currently on securing shareholders' approval for the fundraising at the upcoming AGM. He outlined that the group is open to multiple options provided by the regulator, including rights issuance, private placement, IPOs, and M&As. Investors can look forward to a robust performance from FCMB Group, with a projected 9.9 billion Naira dividend payout for the full year 2023. The group has demonstrated impressive growth in dividend per share and EPS, signaling a commitment to enhancing shareholder value. Fayose assured investors of the group's historical track record of sustainability and emphasized the focus on maximizing shareholders' wealth in a nimble and efficient manner. Looking ahead, FCMB Group maintains a positive outlook for the rest of the year despite global and domestic headwinds. The group's priority is to recapitalise its banking franchise in Nigeria and deliver strong financial results as promised to the market. Fayose's optimism and confidence in the group's ability to navigate challenges and deliver strong numbers underscore FCMB Group's resilience and strategic vision. With a proven track record and a proactive approach to capital management, FCMB Group is well-positioned to capitalize on opportunities and drive sustainable growth in the dynamic Nigerian banking sector.