FCMB proposes 50k dividends for shareholders, records N20.5bn profit
Abuja - The First City Monument Bank PLC (FCMB) board has proposed for approval the payment of 50 kobo dividend per share, up by 43 per cent from the previous year, in spite of the massive growth in capital, based on a whopping N20.5 billion gross profit.
The bank’s gross earnings also grew by 112 per cent in the same period to N52.82 billion from N24.9 billion. The group closed its books with an asset base, including contingents, of N587 billion, a growth of 90 per cent over the previous year and following its successful public offer in 2007, the bank also recorded a significant growth of 330 per cent in its Tier 1 Capital, from N31.2 billion to N133.7 billion.
The results are seen as a further affirmation of the bank’s strengths as highlighted in a recent rating report on the bank by Standard and Poor’s, which cited robust capitalisation, a strong earnings profile and a focused strategy as some of the bank’s First City Monument Bank Plc (FCMB) has closed its 2007-2008 financial year, recording a 171 per cent increase in Profit Before Tax from N7.6 billion in 2007 to N20.52 billion and exceeding its 2008 forecasts by a margin of approximately 10 per cent.
Basic Earnings per Share (EPS) increased by 115 per cent from 63 kobo in 2007 to 135 kobo in 2008, again ahead of its 2008 forecasts of 101 kobo. At current market prices, this would make FCMB one of the best valued stocks in the market on a trailing price earnings ratio basis.
The bank was more efficient in its operations with its Cost to Income Ratio improving from 59 per cent to 49 per cent over the same period and its earnings remain well diversified; a 48 per cent to 52 per cent split (Interest Income: Non-interest Income), demonstrating less reliance on interest income.
According to a statement by FCMB, winner of the Euromoney 2008 award for the Best Equity House in Nigeria and 2007 award for Best Investment Bank, the bank has consolidated on its pre-eminence in investment banking with a deliberate diversification from the traditional and commoditised issuing house and underwriting activities.
It noted that the bank had moved more towards structuring equity linked debt transactions for companies in the infrastructure, real estate and energy sectors. The statement further quoted the Group Managing Director, Mr. Ladi Balogun, as saying that the impressive performance was credited to the clarity and successful implementation of the bank’s business and people strategy.
This success was evident in a growth of 125 per cent in corporate finance income, it added.
“This has been complemented by emphasizing transaction banking for corporate customers (liquidity management and trade) providing further impetus to fees and enabling the bank to defend its net interest margin (7.12 per cent in 2007 and 7.44 per cent in 2008),” the statement said.
Source: ThisDay, Punch
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