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FCMB Grows Profit by 29 Percent to N9.7bn in H1 2020

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FCMB - Investors King

FCMB Posts 29 Percent Increase in PAT to N9.7bn in H1 2020

FCMB Group Plc has said its profit before tax expanded by 26 percent in the first half of the year ended June 30, 2020.

The lender grew profit before tax from N8.8 billion reported in the same period of 2019 to N11.1 billion in the period under review.

The lender disclosed this in a statement on “FCMB Group records impressive half year results as profit before tax rose by 26 per cent to N11.1bn,” released on Tuesday.

Profit after tax grew by 29 percent year-on-year to N9.7 billion in the first half of the year despite the COVID-19 pandemic.

This, according to the lender, translated to a 9.4 percent return on average equity and 49 kobo earnings per share, an increase of 16 percent and 29 percent year-on-year, respectively.

It explained that FCMB Group comprises of commercial and retail banking (First City Monument Bank Limited, Credit Direct Limited, FCMB (UK) Limited and FCMB Microfinance Bank Limited).

The statement noted that the Group has corporate & investment banking (the Corporate Banking Division of the Bank, FCMB Capital Markets Limited and CSL Stockbrokers Limited).

Also, the Group owned the asset & wealth management arms (FCMB Pensions Limited, FCMB Asset Management Limited and FCMB Trustees Limited).

FCMB said, “The half year results also showed that the group recorded an increase in gross revenue by nine per cent to N98.2bn as against N89.8bn for the same period last year.

“Net interest income equally rose by 17 per cent for the first half of 2020 to N45.4bn from N38.7bn posted in the first half of 2019, while non-interest income stood at N17.5bn, an increase of 14 per cent compared to N15.3bn within the six months period last year.”

Lender’s loans and advances rose by 29 percent year-on-year during the period under review and four percent on a quarterly basis to N794.6 billion.
Accordingly, customer deposits jumped up by 28 percent year-on-year to N1.1 trillion in the first half of the year.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Banking Sector

Unity Bank Marks Global Money Week, Engages Students on Financial Literacy

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Unity Bank

Unity Bank Plc has engaged students from all the geopolitical zones of the federation as it facilitated financial literacy training in 15 schools as part of activities to mark the 2024 Global Money Week.

The Financial Literacy Training was held as a strategy for driving financial inclusion of the Central Bank of Nigeria and Bankers Committee. Unity Bank’s Managing Director/Chief Executive Officer, Mrs. Tomi Somefun participated in the programme by facilitating training on financial literacy at NYSC Demonstration Secondary School, Calabar, Cross River State recently.

Mrs Somefun, who was represented by Unity Bank’s Chief Compliance Officer, Mrs. Patricia Ahunanya, provided the students with invaluable insights on the path to wealth creation, including imbibing savings habits, investing, and adopting money management skills early.

Her interaction with the students was aimed at instilling financial discipline and financial management skills for the attainment of financial independence and security while promoting a savings and investment culture. During the session, Mrs. Somefun acknowledged outstanding students and presented them with awards.

The Global Money Week (GMW) is an annual campaign dedicated to raising global awareness about the importance of promoting financial literacy among young people from an early age. The initiative focuses on equipping them with the knowledge, skills, attitudes, and behaviours essential for making informed financial decisions, leading to financial well-being. Each year, a minimum of 40,000 organizations participate in this endeavour, collectively impacting over 60 million children globally.

In Nigeria, the Central Bank of Nigeria, CBN, Banker’s Committee in collaboration with Junior Achievement Nigeria, coordinates the activities for Global Money Week, which sees the participation of financial institutions with nationwide coverage.

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Banking Sector

CBN Halts Opay, Palmpay, Others Onboarding Amid Forex Scandal

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Central Bank of Nigeria (CBN)

The Central Bank of Nigeria’s (CBN) has directed four leading fintech companies, OPay, Palmpay, Kuda Bank, and Moniepoint to halt the onboarding of new customers pending further investigation.

This directive, issued by the apex bank, comes in the wake of allegations linking these fintech giants to illicit foreign exchange transactions.

The move has sent ripples across Nigeria’s burgeoning fintech landscape, raising questions about regulatory oversight and the evolving dynamics of financial technology in the country.

Representatives from two of the affected companies confirmed the CBN’s order, shedding light on the gravity of the situation.

While acknowledging the allegations, they highlighted potential misdirection, emphasizing that the majority of implicated accounts are affiliated with commercial banks rather than fintech platforms.

“I can confirm that 90% of the accounts implicated in the illicit forex transactions are with commercial banks, and only 10% are with fintechs. Why then has the CBN not extended this directive to the commercial banks? We face a widespread issue here, and targeting fintechs seems like an unfair focus on the more vulnerable targets,” one source explained.

This revelation underscores a broader concern regarding regulatory asymmetry within Nigeria’s financial ecosystem.

Despite fintechs demonstrating robust Know Your Customer (KYC) practices, they find themselves under intense scrutiny while traditional banks seemingly evade similar directives.

The controversy deepened with recent revelations from the Economic and Financial Crimes Commission (EFCC), which secured a court order to freeze over 1,100 bank accounts allegedly involved in illegal foreign exchange transactions.

Justice Emeka Nwite’s decision, issued on an ex-parte motion, underscores the urgency to address financial malfeasance within the country.

However, scrutiny seems disproportionately directed towards fintechs, leaving industry insiders perplexed.

“In terms of KYC, the fintechs are doing better than the banks, but all eyes seem to be on the fintechs whenever the issue of KYC occurs,” a source revealed.

This regulatory imbalance raises critical questions about the evolving role of fintech in Nigeria’s financial landscape.

Despite their innovative solutions and customer-centric approach, fintechs face a regulatory framework that appears skewed against them, favoring traditional institutions.

As Nigeria strives to maintain financial integrity and stability, stakeholders must address these regulatory discrepancies to ensure a level playing field for all participants.

The outcome of this saga will not only shape the future of fintech regulation but also define Nigeria’s approach to combating financial crime in an increasingly digitized economy.

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Banking Sector

Zenith Bank Shareholders Approve Holdco Structure

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Zenith Bank EGM

Shareholders of Zenith Bank Plc unanimously approved the restructuring of the Bank to a holding company during a court-ordered Extraordinary General Meeting (EGM) held virtually from Zenith Heights, Zenith Bank Plc, Victoria Island, Lagos, on Friday, April 26, 2024.

In accordance with the Scheme of Arrangement dated March 28 2024, pursuant to Section 715 of the Companies and Allied Matters Act (CAMA), 2020 between the Bank and the holders of the fully paid ordinary shares of 50 Kobo each in the Bank, the shareholders voted to transfer 31,396,493,787 ordinary shares of 50 Kobo each held in the issued and paid-up share capital of Zenith Bank Plc to Zenith Bank Holding Company Plc (the HoldCo) in exchange for the allotment of 31,396,493,787 ordinary shares of 50 Kobo each in the share capital of the HoldCo in the same proportion to their shareholding in the Bank.

Similarly, the shareholders approved that each Existing GDR Holder receive, as consideration for each existing GDR held, one new HoldCo GDR.

The shareholders also approved that all of the shares held by the nominees of the Bank in Zenpay Limited, a direct subsidiary of the HoldCo, together with all rights and liabilities attached to such shares, be transferred to the HoldCo.

The Board of Directors were also authorised to delist the shares of the Bank and the Existing GDRs from the official list of the Nigerian Exchange and the London Stock Exchange respectively as well as re-register the Bank as a private limited company under CAMA Act 2020.

In his remarks during the EGM, the Founder and Chairman of Zenith Bank Plc, Jim Ovia, CFR, thanked the shareholders for their unwavering commitment, which has been instrumental in the Bank’s outstanding performance over the years.

He expressed his delight at witnessing the transition of the Bank to a holding company, which is anticipated to position it advantageously for exploring emerging opportunities in the Fintech space while bolstering its digital and retail banking initiatives.

Also speaking during the EGM, Dr. Ebenezer Onyeagwu, the Group Managing Director/Chief Executive, lauded the Founder and Chairman, Jim Ovia, CFR, for his pivotal role in creating an institution that has consistently been a trailblazer in the nation’s financial services industry.

Dr. Onyeagwu expressed his optimism about the Bank’s growth trajectory in the coming years as it transitions into a holding company structure.

According to him, “The HoldCo structure presents an opportunity for us to unlock value for shareholders in terms of opportunity in other sectors beyond banking. The first part is Fintech, where we have already received the approval and the license from the Central Bank of Nigeria (CBN), which we are launching soon.

“It is going to be focusing on an area that we know has not been touched on by anyone. So it is more like us finding an open wide space where we can begin to operate, and with a HoldCo, what that means is that we have an opportunity to diversify our investment.

“We can begin to look at other business verticals that were restrained by the kind of authorisation we have. So, it presents a big opportunity for us to have a wider lens and scope in terms of what we can do. It will also position us to think of opportunities beyond Africa. We will be looking at key business verticals that have the potential to enable us to create value for shareholders.”

On the recapitalisation plan of the Bank, Dr. Onyeagwu stated that the Bank is on course to receive the needed shareholder’s approval in the forthcoming Annual General Meeting (AGM) slated for May 8, 2024, which will kickstart its capital raising effort in line with the CBN directive.

He expressed confidence in the Bank’s ability to raise the stipulated capital, stating that amongst its peers in the industry, Zenith was expected to raise the least amount due to its already robust capital base.

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