FCMB Group Plc has reported an impressive 54 percent surge in its gross earnings for 2024, driven largely by robust growth in net trading income. According to data obtained from the Nigerian Exchange Group (NGX), the bank’s gross earnings increased to N794 billion in 2024, up from N516 billion in the previous year. Notably, net trading income surged to N60.8 billion from N9.1 billion, highlighting a strong performance in financial market activities.

Breakdown of Trading Income

The NGX data further revealed that FCMB generated N19.3 billion from foreign exchange trading, N35.6 billion from trading in FG bonds, and N5.9 billion from treasury bills. These gains reflect the bank’s strategic positioning in financial instruments amid a volatile economic environment.

Impact of CBN’s Monetary Policy

The Central Bank of Nigeria (CBN) significantly adjusted its monetary policy in 2024, raising the interest rate five consecutive times by a total of 850 basis points. This brought the interest rate from 18.75 percent in January to 27.50 percent in November, effectively increasing borrowing costs.

As a result, FCMB recorded a 75 percent growth in interest income, which rose to N621 billion from N354 billion. Of this, interests earned on loans and advances to customers contributed N433 billion. However, despite the increase in interest income, Net Interest Income (NII) grew at a modest rate of 27.7 percent to N225.4 billion, reflecting pressures from rising funding costs.

Interest and Non-Interest Income Trends

Interest expenses soared by 122 percent to N396 billion from N178 billion, mainly due to a 100.8 percent increase in interest costs from customers’ accounts and a staggering 354.5 percent rise in interest costs from interbank accounts. Nevertheless, non-interest income (NIR) grew by 9.1 percent, driven by an 8.2x increase in foreign exchange trading income and a 3.2x surge in FGN bond trading income.

Despite these gains, FCMB faced a decline in foreign exchange gains by N53.6 billion, following adjustments to comply with the Net Open Position (NOP) limit. The bank’s fees and commission income rose by 20 percent to N74.5 billion from N62 billion, while fees and commission expenses declined by 9 percent to N15.2 billion, enhancing overall NIR performance.

Rising Operating Expenses and Profit Growth

The challenging Nigerian business environment, characterized by energy supply disruptions and rising inflation, led to an increase in FCMB’s operating expenses (OPEX). OPEX grew by 43.2 percent to N228 billion from N157 billion, driven by a 60 percent rise in personnel expenses, a 55.5 percent increase in IT & IS costs, and a 40 percent surge in the AMCON levy.

Despite these cost pressures, net impairment charges declined by 36.7 percent due to lower loan loss provisions. This reduction followed FCMB’s prior provisioning of 72 percent of its FY’23 foreign exchange revaluation gains (N78.3 billion) to cover potential impairments. Consequently, profit after tax (PAT) rose by 16 percent to N107 billion from N93 billion.

Cash Flow and Financial Stability

While FCMB’s earnings and profitability remained strong, the bank faced cash flow challenges. Net cash flow from operating activities fell to a negative N34 billion from a positive N356 billion, indicating that core business operations struggled to generate cash. Additionally, net cash flow from investing activities recorded a negative N101.5 billion due to significant investment in securities.

On the financing side, FCMB paid N9.9 billion in dividends, repaid N52 billion in borrowings, and settled lease payments of N644 million. However, new borrowings of N209 billion boosted net cash flow from financing activities to N135 billion, up from N5.8 billion. As a result, the bank’s cash and cash equivalents increased by 37 percent to N797 billion in 2024, compared to N579 billion in 2023.

FCMB Group Plc’s impressive financial performance in 2024 underscores its resilience and adaptability in Nigeria’s evolving economic landscape. The significant growth in gross earnings, trading income, and interest income highlights the bank’s strong market positioning, even as operating costs and regulatory adjustments pose challenges. Looking ahead, FCMB’s ability to balance revenue growth with efficient cost management will be critical in sustaining profitability and shareholder