FCMB Group Plc has posted an impressive 54% increase in gross earnings, reaching ₦794.81 billion for the full year 2024, driven by higher interest income, strong fee-based revenue, and trading income growth.
Additionally, the group recorded a 16% increase in Profit After Tax (PAT) to ₦107.95 billion, with Earnings Per Share (EPS) rising to ₦5.45 from ₦4.70 in 2023. Despite higher interest expenses and increased operating costs, FCMB maintained strong profitability and balance sheet expansion.
The bank’s unaudited financial statements for the year ended December 31, 2024, highlight continued growth in lending, digital banking investments, and strategic cost management efforts.
Key Financial Highlights (2024 vs. 2023)
- Gross Earnings: ₦794.81 billion (2023: ₦516.36 billion) ↑54%
- Net Interest Income: ₦225.45 billion (2023: ₦176.60 billion) ↑27.6%
- Fee & Commission Income: ₦74.52 billion (2023: ₦62.25 billion) ↑19.7%
- Profit Before Tax (PBT): ₦117.29 billion (2023: ₦104.43 billion) ↑12.3%
- Profit After Tax (PAT): ₦107.95 billion (2023: ₦93.02 billion) ↑16%
- Basic Earnings Per Share (EPS): ₦5.45 (2023: ₦4.70) ↑16%
FCMB Group’s strong revenue expansion and steady profit growth highlight its resilience amid macroeconomic challenges.
Revenue Growth: Key Drivers
FCMB Group recorded a significant 54% YoY revenue increase, driven by:
1. Higher Interest and Discount Income (+75%)
- Interest and discount income surged to ₦621.53 billion, reflecting higher loan volumes and increased yields.
- Loans and advances to customers grew 28% to ₦2.36 trillion, indicating strong lending activity.
2. Surge in Net Trading Income (+568%)
- Net trading income soared to ₦60.87 billion, compared to ₦9.11 billion in 2023.
- This was driven by higher foreign exchange trading gains and treasury investments.
3. Increased Fee & Commission Income (+19.7%)
- Fee and commission income rose to ₦74.52 billion, supported by:
- Stronger digital banking transactions.
- Higher account maintenance and e-payment fees.
- Expansion in wealth management and investment advisory services.
FCMB’s diversified revenue streams helped mitigate cost pressures and support earnings growth.
Earnings Per Share (EPS) Growth: Key Factors
Despite rising costs, FCMB delivered a 16% increase in EPS to ₦5.45, supported by:
1. Higher Net Interest Income (+27.6%)
- Net interest income rose to ₦225.45 billion, reflecting higher interest earnings despite increased funding costs.
- Customer deposits grew 37.7% to ₦4.24 trillion, enhancing liquidity and lending capacity.
2. Improved Loan Quality & Lower Impairment Losses (-36.7%)
- Net impairment losses on financial instruments declined to ₦37.65 billion, compared to ₦59.51 billion in 2023.
- This reflects stronger loan underwriting and risk assessment strategies.
3. Strategic Cost Management & Operating Efficiency
- Personnel expenses increased to ₦79.35 billion (2023: ₦49.58 billion), reflecting higher wage costs and workforce expansion.
- General and administrative expenses rose 36.1% to ₦86.73 billion, primarily due to business expansion and digital transformation investments.
While operating expenses increased, FCMB’s revenue growth outpaced cost expansion, ensuring profitability improvement.
Operational Highlights & Cost Management
FCMB’s financial performance reflects a balance between growth and cost control:
- Interest Expense More Than Doubled (+122%)
- Interest expenses rose to ₦396.08 billion, impacted by higher deposit rates and funding costs.
- Depreciation & Amortization Increased (+24%)
- Reflecting investments in technology, branch expansion, and infrastructure upgrades.
- Loan Portfolio Expanded (+28%)
- Loans & advances to customers increased to ₦2.36 trillion, demonstrating strong credit demand.
The reduction in impairment losses (-36.7%) suggests improved loan performance and risk mitigation strategies.
Balance Sheet Expansion & Capital Strength
FCMB Group reported strong balance sheet growth, positioning itself for sustained financial stability:
- Total Assets: ₦7.06 trillion (2023: ₦4.42 trillion) ↑59%
- Total Deposits: ₦4.24 trillion (2023: ₦3.08 trillion) ↑37.7%
- Total Equity: ₦722.25 billion (2023: ₦462.63 billion) ↑56%
- Additional Tier 1 (AT1) Capital Issued: ₦46.69 billion
- Debt Securities Issued: ₦199.08 billion (2023: ₦133.14 billion) ↑49.5%
The bank’s robust capital base and deposit growth provide a strong foundation for future lending and investment expansion.
Dividend & Shareholder Returns
FCMB maintained its commitment to shareholder returns, with ₦9.90 billion in dividends paid in 2024.
- EPS growth of 16% suggests potential for higher future dividend payouts.
- Improved retained earnings and total equity enhance capital strength for future expansion.
Macroeconomic & Industry Outlook
1. Inflation & Interest Rate Trends
- Nigeria’s inflation stood at 34.8% in December 2024, increasing operating costs.
- CBN’s Monetary Policy Rate (MPR) at 27.5% impacted borrowing costs and interest expense.
2. Foreign Exchange Volatility & Trading Gains
- The naira depreciated to ₦1,533 per USD in January 2025, influencing FX trading income.
- FCMB benefited from higher forex trading margins, boosting revenue.
3. Digital Banking & Financial Technology Investments
- Increased adoption of mobile banking, e-commerce payments, and fintech partnerships.
- FCMB’s ongoing digital transformation supports future growth and customer acquisition.
Strategic Priorities for 2025 & Beyond
1. Continued Revenue Diversification
- Strengthening non-interest income streams, including investment advisory and asset management.
- Expanding corporate lending and trade finance solutions.
2. Digital Banking Expansion
- Enhancing mobile banking platforms to drive customer engagement.
- Accelerating fintech collaborations for seamless financial services.
3. Cost Optimization & Operational Efficiency
- Sustaining lower impairment losses through better credit risk assessment.
- Enhancing automation to control administrative expenses.
4. Strengthening Capital & Liquidity Position
- Further AT1 capital issuance to support loan growth.
- Expanding deposit base to lower funding costs.
Conclusion
FCMB Group’s strong 2024 performance reflects sustained revenue growth, improved profitability, and balance sheet expansion.
- Gross earnings surged 54% to ₦794.81 billion, supported by higher loan income and trading gains.
- EPS increased 16% to ₦5.45, reflecting enhanced profitability.
- Loan and deposit growth remained strong, reinforcing market confidence.
- Total assets exceeded ₦7 trillion, highlighting expansion in financial services.
With a robust capital base, digital banking growth, and improving risk management, FCMB is well-positioned for sustained earnings momentum in 2025.
