FCMB Group Plc, the owners of First City Monument Bank Limited has reported a N7.55bn profit for the H1 period ended 30 June, 2021. This was contained in the Group’s Unaudited Interim Financial Statements for the said period released earlier to The Nigerian Exchange.
The principal activity of FCMB Group Plc is to carry on business as a financial holding company, investing in and holding controlling shares in, as well as managing equity investments in Central Bank of Nigeria approved financial entities.
The Company has seven direct subsidiaries; First City Monument Bank Limited (100%), FCMB Capital Markets Limited (100%), CSL Stockbrokers Limited (100%), FCMB Trustees Limited (formerly CSL Trustees Limited) (100%), FCMB Microfinance Bank Limited (100%), FCMB Pensions Limited (92.80%) and Credit Direct Limited (100%).
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FCMB Group Plc is listed and traded on the Nigerian Exchange Limited under the ticker name FCMB.
Analysis of the Statement of Comprehensive Income or Statements of Profit or Loss
An analysis of the Profit or Loss statements by Investogist Analysts revealed that FCMB saw its Gross Earnings decline by 4.02% when compared with the same period in 2020. It reported a Gross Earnings of N94.22bn, N3.95 lower than the N98.17bn reported in H1 2020.
On the other hand, Fees and commission income grew from N14.23bn to N16.61bn, a 16.75% year on year growth. Further review of the report shows that this growth is attributable to the increase in the income from Electronics fees and commissions.
In H1 2020, FCMB earned N4.32bn from Electronics fees and commissions, while it earned N6.68bn from the same services segment. There was also an increase in the income from Account maintenance; from N1.66bn in H1 2020 to N2.16 billion in H1 2021.
Personnel expenses increased by 3.30%, from N14.14bn to N14.61bn, while the other operating expenses increased by 24.10% from N10.84bn to N13.45bn.
FCMB reported N8.91bn as Profit Before Tax, a 19.51% decline from the N10.84bn reported in the same period in 2020.
N1.35bn was reported as Tax expense, N450.00mn as minimum tax and N903.79mn as corporate income tax.
Profit for the period was 22.10% lower than that reported in H1 2020. The Group posted a Profit of N7.55bn, against N9.70bn reported in H1 2020.
The financial performance earned Shareholders an Earnings Per Share of 38kobo (H1 2020: 49kobo).
Analysis of the Statement of Financial Position
The Group’s balance sheet remained robust, with strong growths in its Cash and Cash Equivalents when compared to its position as at 31 December 2020.
With the Total Asset increasing by 8.94% to N2.24tn, its Cash and Cash equivalent jumped by 53.35% to N339.02bn from N221.07bn as at 31 December 2020.
Deposits from Customers enjoyed a 6.47% marginal increment, from N1.25tn as at 31 December 2020 to N1.33tn as at 30 June 2021.
Total Liabilities also saw single digit increase of 9.65% from N1.83tn to N2.00tn, while Shareholder’s Fund grew by 3.23% to N234.45bn from N227.12bn.
An analysis of the balance sheet show that as at 30 June 2021, FCMBs Assets are fund by Shareholders fund (10.45%) and Liabilities (89.55%).
Analysis of the Statement of Cash Flows
The company recorded positive cash flows across all its business activities.
- N13.51bn was generated from operating activities, well above the N7.53bn generated from the same activities in H1 2020.
- N70.64bn was generated from investing activities, swinging from the N53.45bn used in the same activities in 2020. The high cash generation was as a result of the N241.71bn it made from sale and redemption of investment securities (In H1 2020, it made only N115.36bn from the same investment activity).
- FCMB also generated N16.38bn from its financing activities, significantly lower than the N67.06bn it generated from the same activity in the same period in 2020.
It’s total Cash and cash equivalents at the end of the period stood at N339.03bn (H1 2020: N259.02bn).
About the Company
FCMB Group Plc was incorporated in Nigeria as a financial holding company on November 20, 2012, under the Companies and Allied Matters Act, in response to the CBN’s Regulation on the Scope of Banking Activities and Ancillary Matters (Regulation 3).
FCMB Group Plc is a company domiciled in Nigeria. The address of the Company’s registered office is 44 Marina, Lagos.
The Group has 19.80 billion outstanding shares and a market capitalization of N59.80bn.
Its current share price is N3.08, with a 52 week high of N3.99 and a 52 week low of N1.85.
Analyst’s view
With other banking stocks more attractive than FCMB in terms of earning power and dividend yield, we rate FCMB a NO BUY at the current price.
We consider the fair value of this stock to be in the region of N2.00.
Nnamdi Maduakor is a Writer, Investor and Entrepreneur