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First City Monument Bank Plc has recorded remarkable growth in its financial performance for the nine months ended January 31, 2006 and according to its management, the bank is on course to beat its year-end profit forecasts.
First City Monument Bank Plc has recorded remarkable growth in its financial performance for the nine months ended January 31, 2006 and according to its management, the bank is on course to beat its year-end profit forecasts.
A review of the third quarter results released to the Nigerian Stock Exchange shows that FCMB recorded impressive earnings, from N3.953 billion in the corresponding period of 2005, to N10.274 billion, representing a percentage growth increase of 160 percent.
More spectacular, however, was the growth in profit before tax of 276 percent from N579.532 million in the third quarter of 2005 to N2.177 billion in the corresponding period of 2006. profit after tax also rose by 281 percent from N457.831 million last year to N1.742 billion in January 2006.
The management of the bank attributed the performance to a significant growth in business volumes and market share and also improved productivity, as for every N1 gross earning, N0.21 was converted into profit.
In fact, profitability and productivity would have been significantly higher were it not for the massive investment in branch infrastructure and information technology embark upon by the bank, following its hugely successful Initial Public Offer in 2005.
By the end of the financial year, the bank expects to have 100 branches nationwide, from a modest 23 branches as at April 2005. While these branches are already contributing to the bank's growth in market share, the positive impact on profitability will not be felt until next financial year, when a majority of the branches will break even.
In addition, the bank has invested heavily in information technology hardware and software and expects to complete the installation of a new retail banking friendly technology platform (Finacle Universal Banking System) by May 2006. Again, the productivity gains of this investment will not be felt until the next financial year. All the above are in line with the plans laid out in the bank's public offer prospectus.
The bank has also concluded the integration of Cooperative Development Bank, Nigerian American Bank and Midas Bank. The acquisition and integration of these institutions have also brought significant one-off cost increases.
As the bank enters its final quarter of the financial year, and with most of these costs behind it, management is confident that the financial year will close on a strong note. More importantly, a robust platform has been created that will produce continued exponential growth in profitability and market share in the years ahead.
Over the next few months, FCMB will be unfolding a series of market focused world-class retail banking products, a new mortgage banking business, its international strategy and its response to the attendant opportunities that have presented themselves in the Pension Reform Act.
FCMB will remain the flagship of the diverse financial service group, known as First City Group, and offering unparalleled product breadth of world class standard. The group continues to wax strong in the capital markets arena and recently launched the hugely successful Legacy Fund, a principal guaranteed high yield, high-income mutual fund.