FCMB Group Plc profit after tax climbed by about 16% year on year to N107.8 billion, according to details from its unaudited financial statement for the fourth quarter of the financial year 2024.
The increased profit performance was supported by higher interest income due to sustained monetary policy tightening in Nigeria. Its numbers revealed that earnings per share rose to N5.45 at the end of the period, from N4.70 in the financial year 2023.
Analysts at CardinalStone Securities Limited said despite the 75.1% increase in interest income to N621.5 billion, net interest income grew by a modest 27.7% year on year to N225.4 billion.
Analysts said this reflects the impact of elevated funding cost pressures. Details from the financials revealed that FCMB’s cost of funds increased to 9.1% from 6.0% in 2023.
“Expensive borrowings acquired during the year led to a 2.2x surge in interest expense and weighed down on margin expansion,” CardinalStone said. The group recorded a 1 percentage point contraction in net interest margin (NIM) to 6.9% from 7.9% in financial year 2023.
Supporting interest earnings assets, it was noted that the bank’s non-interest income (NIR) increased by 9.1%, driven by an 8.2x surge in foreign exchange trading income and a 3.2x rise in trading income from FGN bonds.
Analysts at CardinalStone stated that this growth more than offset the impact of an N53.6 billion decline in foreign exchange gains as FCMB adjusted to comply with the net open position limit.
Additionally, fee and commission income benefitted from the 59.9% increase in account maintenance fees and the 22.2% rise in service fees and commissions, contributing to the overall growth in NIR.
The investment firm said FCMB Group’s result translated to a 0.7ppts and 8.1ppts decline in return on average asset (ROAA) and return on average equity (ROAE) to 1.8% and 17.1%, respectively.