FCMB Group Plc released its FY-2017 financial statement, showing decline in top and bottom line performance in the full year.

Gross Earnings declined by 3.66% to NGN169.88 billion, while pre-tax and post-tax profits were lower by 29.47% and 34.38% at NGN11.46 billion and NGN9.41 billion respectively. Compared to Bloomberg’s polled estimates, PBT was 10.03% higher than expected, while PAT was short by 12.71%.

Net interest income inched higher by 1.43% to NGN70.53 billion, with interest expense (+11.26%) reporting a faster growth than interest income (+5.79%) during the year. Interest earned on cash and cash equivalents were higher by 17.86%, while interest income via investments in government and corporate securities grew by 7.29% to NGN24.70 billion.

NIM was 20 bps lower at 8.30%, following a 4 bps decrease in asset yield to 15.20%, and a 75 bps upturn in cost of funds to 7.15%.

NIR also came lower by 32.73% to NGN32.12 billion, owing to 57.82% and 51.94% drop in net trading income and other income respectively, despite a 14.40% increase in net fees and commission income. The decline in trading income was largely driven by the significant decrease in forex trading income by 79.51% to NGN28.26 billion, muting the growths recorded in the gains from treasury bills (+81.21% to NGN1.23 billion) and options and equities (NGN28.26 billion gain in 2017, from NGN2.81 billion loss in 2016) trading.

Despite decrease in total loans and advances to customers by 1.84% to NGN647.80 billion, the NPL to total loan ratio was 116 bps higher at 4.90%. However, cost of risk was 145 bps lower at 3.61%, against 5.06% in the previous year.

Total opex increased by 4.51% during the period, while the cost-to-income ratio surged to 67%, against 56.08% in the previous year.

Tax charge was 7.33% higher at NGN2.05 billion, while the effective tax rate rose 614 bps to 17.90%, from 11.76% in the previous year.