FCMB investors have seen almost 10% of their investment eroded this year as the commercial lender underperformed in the first half of 2021. The bank stock which started the year at N3.25 on January 4 has shed 9.31% of its value to N3.02 as of last Friday and as of Monday morning, it has lost 2.8%.
Besides worrying about the dip in the value of their investment, FCMB shareholders are also concerned by the lacklustre performance of the bank in the first six months of the year.
The lender generated 4.02% less revenue to ₦94.2 billion in the first half of 2021 compared to ₦98.2 billion for the same period last year, undermined by 4.57% decline in interest and discount income to ₦72.67 billion and net trading income which dipped 32.78% to ₦2.64 billion, due to lower volumes of fixed income instrument trades during the quarter, which emanated from result from the foreign exchange liquidity squeeze in the country.
The financial statement of the bank for H1 2021 which was released recently showed that non-interest income went up 2% Year-on-Year to ₦17.9 billion from ₦17.5 billion in the comparable period last year, while fees and commissions income increased 33.5% Year-on-Year on the back of an increase in customers’ transacting activities.
Despite the drop in revenue, expenses did not really moderate as personnel cost rose 3.30% to N14.61 billion and other operating costs up-ticked by 24.09% to ₦13.46 billion during this period, driven by increased regulatory costs and general inflationary pressures.
FCMB, however, made some progress with net impairment loss on financial assets, trimming it by 48.22% to ₦4.0 billion for the six months ended June 2021 from ₦7.7 billion for the same period the prior year.
Its non-performing loan ratio improved slightly by 0.2% to 3.3% in H1 2021 instead of 3.5% in the prior period last year, which is still below the regulatory threshold of 5%.
Loans and advances grew 15% year-on-year to ₦916.7 billion as total assets went up 14% Year-on-Year and 4% Quarter-on-Quarter to ₦2.24 trillion in June 2021.
Also, customer deposits rose by 21% year-on-year to ₦1.3 trillion in June 2021 and total liability rose 9.65% to ₦2.01 trillion during this period.
According to the presentation the bank made to investors recently, Capital Adequacy Ratio (CAR) weakened slightly by 1.2% to 17.1% in H1 2021 and the liquidity ratio strengthened 10.9% to 35.7%.
The regulatory benchmark for capital adequacy ratio and liquidity ratio currently stood at 15% and 30% respectively.
Although the loan to deposit ratio was was still above the 65% threshold, it declined marginally by 2.2% to 70.0% in H1 2021.
Cost to income ratio increased by 12.1% to 78.8%, a pointer that the lender spent a larger chunk of its revenue as cost.
FCMB earnings per share stood at ₦38.16 kobo in the first six months of the year.