FCMB Group Plc reported a pre-tax profit of N27.6 billion for the third quarter of 2024, up from N16.9 billion at the same time the previous year.
The total pre-tax profit for the nine months ending September 30, 2024, was N91.8 billion, a 63.35% increase from the previous year.
The company’s earnings from fees and commissions increased by 77.06% to N16.3 billion in the third quarter of 2024.
Gains from trading FGN bonds were the primary cause of the significant increase in net trading revenue, from N1.1 billion in Q3 2023 to N18.4 billion.
Key Financial Highlights
- Gross Earnings: ₦213.3 billion, up 88.18% YoY
- Interest Expense: ₦109 billion, up 160.36% YoY
- Net Fee and Commission Income: ₦16.3 billion, up 77.06% YoY
- Net Trading Income: ₦18.4 billion, up 1555.04% YoY
- Other Income: ₦21 billion, up 104.38% YoY
- Pre-tax Profit: ₦27.6 billion, up 63.35% YoY
- Post-tax Profit: ₦22.9 billion, up 66.71% YoY
- Net Change in Equity Fair Value: ₦15.3 billion, down 33.92% YoY
- Earnings Per Share (EPS): ₦4.63, up 66.55% YoY
- Total Assets: ₦6.8 trillion, up 54.21% YoY
Interpretation:
Even though interest expenses increased significantly during the quarter, a closer look at FCMB’s results reveals a great performance.
- In the third quarter of 2024, gross earnings increased by 88.18% year over year to N213.3 billion, for a total of N587.7 billion for the nine months.
- However, a 160.36% increase in interest expenses, which reached N109 billion for the quarter, somewhat negated this positive progress. greater borrowing and deposit costs were mostly to blame for this increase, leading to greater financing costs.
- However, FCMB’s net fee and commission income increased by 77.06% in the third quarter, reaching N16.3 billion.
- This rise enhanced the company’s overall performance since service fees and commissions accounted for almost half of its N29.1 billion in commission income over the nine months.
Similarly, foreign exchange profits and robust performance in FGN bond trading were the main drivers of net trading income’s significant increase of 1555.04% year over year to N18.4 billion.
Foreign exchange trading accounted for N17.9 billion of the total trading income for the nine months, which increased to N27.3 billion due to these gains.
- The company’s “other income” increased by 104.38% yearly to N21 billion during the third quarter. Gains in foreign exchange drove a large portion of this, supporting FCMB’s total revenue.
- FCMB’s profit margins held up well despite the increase in interest costs. The third quarter of 2024 saw a 63.35% increase in pre-tax earnings to N27.6 billion and a 66.55% increase in post-tax profit to N22.9 billion.
- Earnings per share increased significantly in Q3, up 66.55% to N4.63 from N2.78 the year before, reflecting this excellent performance.
- As of September 30, 2024, FCMB’s total assets had increased by 54.21% yearly to N6.8 trillion.
The N1.2 trillion in securities investments, the N2.5 trillion in customer loans and advances, and the N1.1 trillion in limited reserve deposits are important factors in this growth.
