FCMB: TOUGH LUCK FOR A MONUMENT

The FCMB Group, with a name that makes monument a thing of pride, is certain to have ended year 2015 with some tough luck.
Or so the figures for nine months to September released last week show quite clearly.
The major blow was from 290.7% leap in loan loss provision from N3912.9m by September 2014 to N15287.5m..The corresponding provision for loan loss in full 2014 year was N10639..9m.
Major yes, but it was not the only blow to the jugular. Another worthy of attention was the 9.30% rise in interest expense to N38686.6m from N35396.2m when compared to only 3.42% rise in interest income from N84500.6m to N87396.4m within the period.
Others were lesser pressures but with clear impacts too.
For one, gross earnings growth was very sluggish at 2.43% to N109294.2m from N149637.4m principally as income from investment and others eased by 4.12% to N19629m from N20472.3m previously.
For another, operating expense rose by 3.29% to N50499.2m from N48880.9m. In a way not that threatening but put alongside gross earnings slow coach, it didn't look good.
In the end, FCMB settled for 84.1% drop in profit before tax to N2563.1m for the period from N16782.9m previously.
That meant that the group's profit margin dived closer to loss league at 2.35% as against double digit 15.7% at the same time in 2014.
SO:
* It is possible that margin improved during the third quarter like in 2014 year but expect no miracles: FCMB isn't likely to declare any dividend when full year's figures roll out.
* The key of course, remains whether loan loss provision still grows or drops as it did in 2014 third quarter making then nine months provision higher than for the full year

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