…over late disclosure of ex-GMD’s retirement, other infractions
The Financial Reporting Council of Nigeria has penalised First City Monument Bank Plc to the tune of N28.3 million, over its late disclosure of the retirement of its former Group Managing Director, Mr. Ladi Balogun.
The financial institution was also sanctioned for improper disclosure in its 2017 audited financial statement, as the bank allegedly failed to comply with a Central Bank of Nigeria’s circular, which stipulated the timelines for the submission of daily, monthly, quarterly, semi-annual returns and other information, concurrently, via the electronic financial audit sub-system and financial analysis applications. These are software that aid banks’ information transmission to the CBN.
The CBN circular, with reference number FPR/DIR/CIR/GEN/05/014, stated, “Late notification to the Securities and Exchange Commission on the retirement of Ladi Balogun as the Group Managing Director of First City Monument Bank Limited and non-response to customer’s complaint for unalloted shares/dividend are violation of Rules 9 (8) and 34 (1) (e) and sanctionable under rule 7 of SEC rules and regulations 2013.”
Meanwhile, FCMB Group, which is the holding company of First City Monument Bank Limited, FCMB Capital Markets Limited, CSL Stockbrokers Limited and CSL Trustees Limited, reported a number of depreciable growths in key operating areas, going by the audited results of the bank.
Gross earnings declined by 3.66 per cent to N169.88 billion, while pre-tax and post-tax profits were lower by 29.47 per cent and 34.38 per cent, at N11.46 billion and N9.41 billion, respectively.
The bank’s profit before tax was 10.03 per cent higher than expected, while profit after tax was short by 12.71 per cent.
According to analysts at Cordros Capital, FCMB’s net interest income inched higher by 1.43 per cent to N70.53 billion, with interest expense of +11.26 per cent, reporting a faster growth than interest income of +5.79 per cent during the year.
Interest earned on cash and cash equivalents were higher by 17.86 per cent, while interest income via investments in government and corporate securities grew by 7.29 per cent, to N24.70 billion.
The bank said that the decline in trading income was largely driven by the significant decrease in forex trading income by 79.51 per cent to N28.26 billion, muting the growths recorded in the gains from treasury bills (+81.21 per cent to N1.23 billion) and options and equities (N28.26 billion gain in 2017, from N2.81 billion loss in 2016) trading.
It noted that despite a decrease in total loans and advances to customers by 1.84 per cent to N647.80 billion, the non-performing loans to total loan ratio was 116 basis points higher at 4.90 per cent. However, cost of risk was 145 bps lower at 3.61 per cent, against 5.06 per cent in the previous year.
Total opex increased by 4.51 per cent during the period, the cost-to-income ratio surged to 67 per cent, against 56.08 per cent in the previous year, while tax charge was 7.33 per cent higher, at
N2.05 billion.
The effective tax rate rose 614 bps to 17.90 per cent, from 11.76 per cent in the previous year. A dividend of 10 kobo was proposed for the full year, translating into a yield of 4.20 per cent, FCMB
disclosed.
