Culled—Proshare
July 31, 2020
By Cardinal Stone Research
FCMB Group Plc (FBNH: TP – N1.87: HOLD) result highlights:
- H1’20 earnings increased by 28.5% YoY supported by a 16.4% increase in operating income
- On a quarterly basis, earnings improved 5.9% (QoQ), reflecting improving non-interest revenue (+3.5% QoQ) and moderating operating expenses (-5.1% QoQ)
- The 3.5% QoQ growth in non-interest revenue was largely driven by 31.6% QoQ growth in FX revaluation gains and 8.3% increase in net trading gains
- Net impairments on financial assets rose 10.1% during the quarter. Cost of credit risk and NPL ratio were flat at 2.1% and 3.5% respectively during the quarter
- Operating expenses eased 5.1% QoQ, highlighting better operating efficiency, even as cost to income ratio moderated 240 bps to 68.8%. The improvement in operating efficiency possibly relates to work-from-home measures as the bank had previously hinted that about 50% of its staff would work from home through 2020
- Gross loans to customers increased by 4.3% while customer deposits rose 11.0% relative to Q1’20
