Tough second quarter for FCMB as revenue and profit lines decline

FCMB Group weekend released its 2017 results which showed a drop in profits. The bank’s profit before tax PBT, fell by about 87 per cent on annualised basis just as profit after tax PAT, node dive by 92 per cent when compared to last year figures. This was mainly because of negative base effects.
According to FBNQuest Research note to investors “last year’s results were propped up by significant one-off foreign exchange-related gains. This explains why non-interest income was down by 75 per cent to N5.3 billion. Net interest income also fell, by 13 per cent down to N17.0 billion because of a spike in interest expense.
The second quarter result showed that the bank grew its interest income by only 1 per cent per cent. The marked reduction in both revenue lines proved significant relative to a 50 per cent fall in loan loss provisions – and to a lesser extent a 5 per cent decline in operating expenses which lead to the profit before tax PBT, decline. On a quarterly basis, although funding income grew during the period, non-interest income was again down visibly. This contributed to a 7 per cent quarterly decline in PBT. As a result non-interest income missed by 26 per cent, leading to profit before provisions coming in 8 per cent below analyst forecast.