FCMB issues profit warning for 2015

According to Peter Obaseki, the Managing Director of FCMB Group Plc, “3Q15 earnings as at September 2015, will be materially below earnings for the same period in 2014, due to two factors: a spike in impairments particularly in the energy sector and the significant reduction in trade finance-related revenues due to foreign exchange illiquidity.

FCMB Group Plc has issued profit warning in respect of its third quarter results ending September 30, 2015.

The group said in a statement to the Nigerian Stock Exchange (NSE) that it would use the fourth week in January 2016 for the completion of its banking subsidiary’s interim audit, which should pave way for the release of the 3Q15 earnings results of the group before the end of January 2016.

According to Peter Obaseki, the Managing Director of FCMB Group Plc, “3Q15 earnings as at September 2015, will be materially below earnings for the same period in 2014, due to two factors: a spike in impairments particularly in the energy sector and the significant reduction in trade finance-related revenues due to foreign exchange illiquidity.

This trend continued in 4Q15 and largely emanated from wholesale banking activities, while retail banking showed greater resilience and earnings momentum, adding that, “2016 will be characterised by continued growth in retail contribution, stabilisation of wholesale banking revenues and increased focus on cost efficiencies (opex, funding and risk) in order to restore earnings levels.”

FCMB Group’s foundation dated back to 1977, with the formation of City Securities Limited (CSL), a stockbroking and issuing house and registrar business. CSL rapidly climbed the league of issuing houses and brokers between 1977 and 1982, handling the listings and initial public offers of many of the leading blue-chip companies on the Nigerian Stock Exchange (NSE).

First City Merchant Bank Limited was established in 1982 with seed capital from the success of CSL. It began operations as a licensed deposit taker and merchant bank on 11 August 1983 assuming the corporate finance and issuing house activities of CSL and becoming the first Nigerian merchant bank to be established without government or international support. First City Merchant Bank Limited soon became a leading merchant bank in Nigeria, as measured by profitability, and, in 2000, the first and only merchant bank to achieve N1 billion profit. With the advent of universal banking in 2001, First City Merchant Bank Limited converted into a universal bank.

It changed its name to First City Monument Bank Limited and commenced commercial banking activities, while its corporate finance activities were spun -off into a new subsidiary –FCMB Capital Markets Limited.

In 2004, the bank changed status from a private limited liability company to a public limited liability company, and was listed on the NSE in December of that year. In 2010, the Central Bank of Nigeria (CBN) issued Regulation 3 (Scope of Banking Activities and Ancillary Matters, No. 3, 2010), which required banks to divest their non-banking businesses or retain them under a CBN-approved financial group structure.

As a result of this reorganisation, the newly created FCMB Group Plc became the holding company, with First City Monument Bank Plc (FCMB Plc), CSL Stockbrokers Limited (CSLS) and FCMB Capital Markets Limited (FCMB-CM) as direct subsidiaries.

Shareholders of FCMB Plc were also migrated to FCMB Group Plc via a one -for-one share exchange between FCMB Group Plc and FCMB Plc. FCMB Plc, the bank, was thereafter re-registered as a limited liability company, becoming First City Monument Bank Limited (FCMB Limited).

First City Monument Bank Limited has 2.8 million customers and 254 branches and cash-centres spread across every state of the Federal Republic of Nigeria and in the United Kingdom through FCMB UK (which is authorised by the Prudential Regulation Authority (PRA) and regulated by the Financial Conduct Authority (FCA) and the PRA in the United Kingdom).