Onome Amuge
FCMB Group Plc has reported an increase in profit after tax to N32.2 billion for the first quarter of 2025, an 11.8 per cent increase from the N28.8 billion recorded in the corresponding period last year. The results, detailed in the bank’s unaudited financial statement, underscore solid growth in interest income and improved efficiency in fee-based activities, which helped to mitigate the impact of the non-recurrence of one-off gains that boosted the Q1 2024 figures.
The financial conglomerate saw a 41.1 per cent year-on-year rise in gross earnings, reaching N252.7 billion, up from N179.1 billion. This expansion was primarily driven by a 71 per cent jump in interest and discount income to N214.4 billion, fuelled by both increased loan volumes and the repricing of assets in response to the prevailing higher interest rate environment in Nigeria.
While interest expenses also saw a substantial increase of 81.2 per cent to N126.9 billion, reflecting the elevated cost of funds across the banking sector, net interest income still climbed 57.9 per cent to N87.5 billion, indicating effective balance sheet management and margin optimisation.
Strong growth in fee income and trading gains
FCMB also demonstrated strong performance in its fee-generating activities, with fee and commission income rising by 43.4 per cent to N24.3 billion, compared to N16.9 billion in Q1 2024. Net fee and commission income, after expenses, stood at N18.8 billion, up from N11.9 billion in the same period last year, supported by increased digital transactions, card usage, and advisory services. Net trading income also jumped to N14.3 billion from N9.5 billion, driven by gains on fixed income securities.
However, other non-interest income was notably impacted, recording a net loss of N440 million compared to N27.1 billion appreciation in Q1 2024. The bank attributed this sharp decline to the absence of income from asset disposals that had boosted the prior-year figures.
Cost pressures offset by improved asset quality
Operating expenses increased across most categories due to inflationary pressures, with personnel expenses rising by 35.1 per cent to N22.8 billion and general and administrative expenses jumping by 73.9 per cent to N29.5 billion. Depreciation and amortisation expenses also climbed to N3.9 billion.
Despite these rising costs, FCMB maintained profitability, aided by strong revenue growth and an improvement in credit risk management. Net impairment losses on financial instruments declined sharply by 59.9 per cent to N9.5 billion, suggesting improved asset quality and effective provisioning discipline.
Marginal increase in pre-tax profit
According to the financials, profit before tax saw a modest increase to N35.0 billion, up from N31.3 billion in Q1 2024. After a tax charge of N2.6 billion, profit for the period settled at N32.2 billion. Total comprehensive income for the period reached N42.0 billion, supported by fair value gains on debt instruments and foreign currency translation adjustments.
Earnings per share (EPS) stood at N3.25, compared to a higher N5.81 in Q1 2024, with the prior period benefiting from the aforementioned exceptional gains.
Standalone performance reflects absence of one-offs
At the company level, gross earnings declined to N4.6 billion from N9.2 billion in Q1 2024, largely due to the absence of non-recurring gains. However, net profit remained relatively stable at N794 million, reflecting efficient cost controls and income stability from investment activities.
Outlook hinges on digital growth and asset quality
FCMB’s Q1 2025 results showcased a resilient business model with diversified revenue streams and improved asset quality. With interest rates expected to remain elevated and inflation gradually stabilising, the group is positioned to maintain strong operating margins.
However, analysts noted that future earnings growth will depend on continued momentum in its digital banking initiatives, efficient capital utilisation, and the sustained quality of its asset portfolio. The steady first-quarter performance provides a positive outlook for the remainder of the financial year, with investors closely monitoring the bank’s Q2 results for confirmation of its full-year earnings trajectory.
