FCMB: Sustaining Quality Services

For the First City Monument Bank (FCMB) Group Plc, banking is all about service and meeting customers at the point of their needs. So, when the bank posted an increased revenue earning of 11 per cent or N77.4 billion in the first six months of the year with a pre-tax profit of N9.6 billion, many saw the performance as a bountiful reward for hard work.

The period also saw an increased business momentum, with total assets growing 15 percent year-on-year to N1.22 trillion and up five percent Year-to- Date (YTD). Equally, customers’ confidence in the lender remained strong, as deposits grew by four percent during the period to N785.8 billion, just as its diversification across commercial investment banking and wealth management, provided a cushion as earnings from non-banking activities proved more resilient.

FCMB Limited, the commercial and retail banking subsidiary of  the grou has continued to validate its increased drive into retail, contributing 21 per cent (N1.7 billion) of FCMB Limited’s Profit Before Tax. The retail group also grew deposits by 21 percent year-on-year to N431.2 billion, or 54 per cent of total deposits. The bank continued its drive of inclusive lending, granting over 9,100 new loans to micro-enterprises, even as its credit card offering saw increased patronage, with over 17,000 cards issued in the first half of this year.

Corporate banking was, however, constrained by scarcity of foreign exchange and tight monetary policy, which affected trade finance, foreign exchange trading and lending. In the first half of the year, the bank’s UK wholesale banking subsidiary, FCMB Bank (UK) Limited, broke even after 14 months of taking off as a deposit-taking institution. The investment banking group of FCMB Group Plc – comprising  financial advisory (FCMB Capital Markets Limited (FCMB-CM)) and stockbroking (CSL Stockbrokers Limited (CSLS)) – delivered a six percent increase in Profit After Tax (PAT) of N414 million, driven by financial advisory, equity capital raising and asset management fees.

The Managing Director of FCMB Group Plc, Peter Obaseki, acknowledged that, “the economy has entered a higher risk level with inflation climbing to 9.2 percent, fiscal and trade deficits. Declining GDP growth rate below four percent as at Q1 2015 from 5.94 percent as at Q4 2014; broad money supply (MM2) contracted by N380 billion in June, from N19.19 trillion in May, to N18.81 trillion. The group results for H1 2015 reflects a deliberate conservative stance aimed at maintaining robust capital buffers in the face of a tough macro-economic and regulatory environment. Group Managing Director/ CEO of FCMB Limited, Ladi Balogun, said the “first half 2015 was characterised by significant macro-economic and policy headwinds.”

Bond issuance

FCMB Limited has listed its N26 billion Series 1, 7-Year 14.25 per cent Fixed Rate Unsecured Bond on the Financial Market Dealers Quotations (FMDQ) Over-the-Counter (OTC) Plc platform its platform. The bond, which is due in the year 2021, is under a N100 billion debt issuance programme. FCMB Capital Markets Limited, the investment banking subsidiary of FCMB Group Plc, is the issuing house and sponsor of the bond.

The bank informed that proceeds of the bond will be used in strengthening its capital base, enhancing its capital adequacy ratio, expanding its distribution channels and infrastructure as well as growing its risk assets with a view to enhancing income.

Speaking during the listing, the Group Managing Director/Chief Executive of FCMB Limited, Mr. Ladi Balogun, said: ‘’The significance of listing the FCMB bond on the FMDQ platform is hinged on the availability of a readily accessible liquid market to the bondholders, where the value of their investments can easily be determined and monitored on a daily basis. It also provides a platform to realise their investment when necessary”.

He added: “The bond provides a long term capital that will help us to reinforce our commitment to our customers”.

Balogun praised FMDQ’s efforts towards creating more depth in the debt market, while applauding the platform’s seamless processes and its drive to achieve market transparency by deploying technology driven initiatives.

Reward for excellence

The various valued added initiatives being driven by FCMB Limited at enhancing its operations and customer experience have continued to receive positive affirmation. This follows the rating of the Bank by KPMG, a leading international consulting firm, as the fourth most customer-focused bank in Small and Medium Enterprises (SMEs) with a score of 74.94 percent and fifth in retail banking with 73.16 per cent by bank customers surveyed nationwide.

This performance, which is coming barely four years after the bank transformed to become a retail and commercial banking-led lender, is an improvement when compared to 2014 where the bank occupied the eighth and seventh position in the SMEs segment and retail banking space.

The rating, as contained in the 2015 report of the KPMG Banking Industry Customer Satisfaction Survey (BICSS), was on the basis of Customer Satisfaction Index (CSI), which took into account convenience, product/service offering and value for money and customer care.

The KPMG BICSS survey was launched in 2007 to heighten the consciousness of service delivery among banks. The survey has evolved over the years and in the year, it covered over 23,000 retail customers, 2,800 SMEs and 400 corporate/commercial organisations across the country.

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