Total expenses gulp 28% of revenue
Curtailing its rising expenses is a battle which the management of FCMB Plc Group will have to conquer if the Tier-2 commercial bank must remain profitable in the medium to long term.
The Group, according to its unaudited financial statement for the period ended December 31, 2021, made available to investors and stakeholders on the Nigerian Exchange Limited last week, showed that total expenses (general and administrative expenses and operating expenses) recorded a staggering increase to the tune of about 22.3% year-on-year (YoY).
The figure increased from N47.26billion as at December 31, 2020 to N57.79billion as at the review period ended December 31, 2021 (unaudited).
The Group’s total expenses during the 2021 financial year account for about 28% of gross earnings (Revenue). Total expenses accounted for only about 24% of gross earnings in the financial year ended December 31, 2020.
Breakdown of expenses showed that general and administrative expenses increased from N30.48billion in 2020 to about N34.58billion in 2021, representing an increase of 13.5% while other expenses increased by 38.32% to N23.21billion as at December 31, 2021 from about N16.78billion in the preceding financial year.
Accordingly, Profit after Tax also recorded a marginal growth of 6.53% from N19.61 billion as at December 31, 2020 to N20.89billion as at end of December 2021.
Net Interest Income dropped by 0.32% down to N90.47billion in the review financial period as against N90.76billion generated from customers as at December 31, 2020 while Net Fee and Commission Income surged significantly by 42.8% from N19.56billion to N27.93billion in the review period.
The Group’s Total Assets increased by 20.4% to about N2.48trillion as at December 31, 2021 compared to N2.06trillion in the preceding financial year as Liabilities also grew to N2.24trillion from N1.83trillion, representing 22.4% increase.
