Following months of legal and regulatory scrutiny, First City Monument bank (FCMB) Plc has finally consummated its merger with FinBank Plc after the Federal High Court in Lagos authenticated the deal last week.
Speaking on the merger, Group Managing Director of the bank, Ladi Balogun said: “With the culmination of the legal and regulatory processes, we are now able to integrate our operations fully and deliver the expected benefits to shareholders and customers. The enlarged single entity is well positioned to compete in the consolidating banking landscape.”
“Our customers will experience continued improvements in the customer experience, improved convenience, greater and quicker access to financial support, with simple processes, products and communication. This is, indeed, a pivotal transaction for the Bank and one that will lead to significant and sustained increase in shareholder value.”
Meanwhile, the financial institution released its un-audited International Financial Standard (IFRS)-compliant group financial results for the third quarter of 2012 to the Nigerian Stock Exchange (NSE) on Monday.
According to the bank statement released by FCMB Head, Corporate Communications, Babatunde Shofowora, the bank posted a 12.1 billion naira ($77 million) profit before tax – accounting to a 23 percent increase. The annualised Return on Equity (ROE) also rose by 45 percent in September 2012 to 11.0 percent from 7.6 percent for the corresponding period of 2011.
Further review of the bank’s performance showed that the group net revenues for the same period went up by 36 percent (year-on-year) to close at 34.5 billion naira ($220 million) while net revenue grew by 11 percent (quarter-on-quarter), coming from better margins that saw net interest income rising by 13 percent in the third quarter 2012. Non-interest revenue stood at 6.6 billion naira ($42 million), indicating an eight per cent growth.
“On the balance sheet side, the bank’s capital adequacy and liquidity ratios remain strong in spite of risk asset growth at 22 percent and 56 percent, respectively. Low cost deposit mix was 58 percent, representing an improvement of 4 percent (year-on-year) and 14 percent (quarter-on-quarter).
“The growing liquidity of the bank was evidenced by the 14 percent (quarter-on-quarter) growth in balances with other banks to 126.4 billion naire. Net interest margin also improved to 7.6 percent in third quarter from 6.8 percent in the corresponding period, enabled by a better deposit mix and continued growth in retail loans, ” the bank statement reads.
The statement also quoted the Bank boss: “In 2012, the main activity has been the FinBank acquisition and merger, which is now complete from legal and regulatory perspectives. The FinBank acquisition, with its subsequent merger, has added 30 percent to the balance sheet and transformed the bank’s liquidity profile. It has taken the Loan-to-Deposit ratio from 87 percent to 59 percent and the liquidity ratio from 50 percent to 56 percent compared to this time last year and has also doubled our distribution capacity from 130 to 280 branches and two million customers.”
Balogun also admitted that while the merger gave the opportunity for sustainable, rapid and profitable growth, particularly in the commercial and retail segments, remained significant; its process had nevertheless been costly.
