First City Monument Bank Plc (FCMB) has proposed a dividend pay-out of five kobo per share for the eight months ended December 2009.
This indication emerged from the bank’s financial results released in Lagos on Monday, which also shows Profit Before Tax (PBT) peaking at N857 million for the same period.Expectedly and as a result of the significant slowdown in business (particularly in asset creation and capital market activities), the bank witnessed a measure of annualised declines in some of its performance parameters like gross earnings, net operating income and profitability declining by 25 per cent, 33 per cent and 73 per cent respectively.
Commenting on the results, Chief Risk Officer of the bank, Mr. Debo Adesanya, said: “The bank’s focus, in the course of the last quarter of 2009 and first quarter of 2010, was mainly on recovery of the classified assets following the Central Bank’s Stress Test. This stance yielded positive results, with over N9 billion of the classified assets recovered in 2009, thus leading to an improvement in the Non-Performing Loan (NPL) ratio to nine per cent by December 2009 from a peak of 15 per cent in October 2009.”During the year, there was a deliberate reduction in risk assets to enable the bank strengthen its credit underwriting process and rebalance its portfolio. These factors led to about 12 per cent decline in the net risk assets of the Group. Excess liquidity and the desire not to maintain a high level of idle funds made the bank pay down some tenured funds thus, also reducing the level of deposits by about 17 per cent as at end of December 2009.
The bank’s shareholders’ funds grew by 0.7 per cent to N130 billion (March 2010) and its Capital Adequacy Ratio remains amongst the highest in the industry at 32 per cent, indicating the bank is well positioned to capitalise on future growth opportunities.An improvement is evident in first quarter 2010, where the bank closed with a 32 per cent growth (from December 2009) in PBT of N1.1 billion, grew net loans by 17 per cent to N281 billion and saw a further reduction in NPLs to eight per cent.”
Commenting on the future outlook of the bank, FCMB Chief Financial Officer, Mrs. Yemisi Edun, said: “Our set strategy remains our target of leadership in three profitable niches – Retail Finance,Investment Banking and Transaction Banking. The year 2009 saw several years of very significant investment come to an end. Whilst many of these investments are yet to attain break even we are very confident that they will and the next few years will see increased profitability with reduced investments.
In 2010, the profitability run-rate will continue to improve steadily as the loan book grows and capital market activities gather momentum. Furthermore, the bank will continue to seek out efficiency gains. 2010 promises to be a vastly improved year, and by 2011 the bank should be performing significantly beyond the levels attained prior to the downturn in the industry.”