FCMB Valuation Declines To N70bn

FCMB Group Plc saw its market valuation decline by about 8% in the last seven trading sessions to N70.299 billion on Friday, according to data obtained from the Nigerian Exchange.

The financial service group share has only yielded 1.14% from the beginning of the to date amidst plan to pay 25 kobo as final dividend. Over 30-day period, FCMB share has lost 16.08%.

The group has recently boosted its capital position with N20 billion raised at 16% in the local debt capital market. With 19.802 billion shares outstanding, the stock market price of the financial services group settled at N3.50 per unit on Friday.

After the early boom in 2023, the local bourse appears to be giving up gains as the bearish trend resumes unabated.

Last week, the stock market indicators plunged 2.1%, losing more than N601 billion in capitalisation due to activities of profit takers. And banking sector was the key target, down by 1.4% last week.

With the additional Tier 1 capital raised in March, analysts guide that FCMB is positioned to drive earnings growth in 2023.

Though, the bank has lowered its earnings expectations following failed implementation of Nigeria’s naira redesign policy that spooked the economy in the first quarter.

The air of naira scarcity flows through the second quarter and others Banks have made similar gestures about their earnings outlook. In its 2022 results, FCMB delivered healthy earnings performance as the group doubled down on its profit.

Pretax profit printed at N37.11 billion in the financial year 2023, from about N23 billion reported in the comparable period in 2021.

FCMB Group’s gross earnings spiked following an increase in lending appetite to reduce the Central Bank’s persistent cash reserves debit for failure to meet its 65% loans to deposit target.

Down by 7.79% in seven days, FCMB has upside potential in 2023, some optimistic analysts said. Year to date, the group valuation has increased in the stock market by 1.24% to #70.1 billion.

The group declared a 25 kobo dividend per share for its shareholders which it announced Friday, 28 April 2023 as the payment date.

In 2022, the bank’s pretax profit inched higher by about 56% year on year to N32.91 billion from N20.916 billion in the corresponding year in 2022 despite higher tax payment obligations in the period.

A well-diversified financial service group’s profit for the year printed above N32.59 billion, up 55.82% from N20.916 billion reported in the comparable period in 2021. #FCMB Valuation Declines to N70bn