Onome Amuge

First City Monument Bank Group Plc (FCMB) has reported a double-digit rise in half-year profit as stronger asset yields and rapid growth in its digital business helped offset weaker non-interest income and rising costs, underscoring the resilience of Nigeria’s mid-tier lenders in a turbulent macroeconomic environment.

In unaudited results filed to the Nigerian Exchange recently, the financial services group posted a profit before tax of N79.3bn for the six months to June 30, 2025, representing a 23 per cent increase year on year. Net profit climbed by the same margin to N73.4 billion. Gross revenues expanded to N529.2 billion, up 41.3 per cent from N374.5bn in the first half of 2024.

The performance was underpinned by a sharp rise in net interest income, which nearly doubled to N207.4bn, as yields on earning assets strengthened to 20.2 per cent. The group’s net interest margin widened to 9.1 per cent, compared with 6.3 per cent in the 2024 financial year, helped by a more favourable funding mix and lower cost of deposits.

“The second quarter saw meaningful improvements in asset yields and funding costs, leading to a net interest margin of over 10 per cent,” the group said, adding that management expected to exceed its full-year margin guidance.

FCMB’s growing digital franchise, spanning payments, lending and wealth services, continued to deliver healthy results, with revenues climbing 60 per cent to N73.6 billion. Digital now accounts for almost 14 per cent of group earnings, highlighting the bank’s diversification away from traditional balance-sheet lending.

The resilience of its core banking and digital segments helped counterbalance weaker non-interest income. That line fell 35.1 per cent, reflecting a N36.6bn decline in foreign-currency revaluation gains compared with last year, when the naira’s steep devaluation produced exceptional windfalls for banks.

Operating expenses rose 46.1 per cent to N153.2bn, driven by inflationary pressures, higher personnel expenses and increased regulatory levies. Nigeria’s consumer inflation remains near three-decade highs, compounding cost challenges across the sector.

Despite the expense growth, FCMB managed to improve its cost-to-income ratio to 57 per cent, compared with 59.9 per cent at the end of 2024, as revenue growth outpaced cost inflation.

Credit impairment charges, however, rose sharply following the expiry of the Central Bank of Nigeria’s loan forbearance programme. Net impairment losses on financial assets reached N36.2bn in the quarter, lifting the group’s cost of risk to 2.8 per cent, from 1.8 per cent in 2024.

The banking group remained the main driver of earnings, contributing 82 per cent of group pre-tax profit after posting a 41.3 per cent year-on-year increase. Consumer finance delivered the fastest growth, with profit before tax up 54.5 per cent, while Investment Management rose 10 per cent.

By contrast, investment banking saw a 48.9 per cent decline, reflecting the absence of a large one-off gain booked in the previous year from a divestment. Nonetheless, the unit arranged over N2.97tn in capital raises for clients during the first half, more than six times the level a year earlier.

The group’s balance sheet strengthened over the six months. Total assets rose 6.9 per cent to N7.54 trillion, while customer deposits climbed 5.6 per cent to N4.55 trillion, supported by a rising share of low-cost current and savings accounts. Such deposits accounted for 69.3 per cent of the total at the end of June, up sharply from 57.5 per cent at the end of 2024, reducing reliance on more expensive funding sources.

Loans and advances grew only 1.1 per cent to N2.38tn, weighed down by currency revaluation effects, loan write-offs and concentrated repayments. Assets under management rose 15.5 per cent to N1.58trillion, underscoring steady inflows into FCMB’s asset management arm.

FCMB has been working to strengthen its capital base ahead of tougher regulatory requirements. The group raised N144.6 billion in a public offering last year and said the Central Bank had now verified the second tranche of its capital programme, being a N22.5 billion mandatory convertible note issue that will lift outstanding shares to around 42.8 billion.

The financial services group stated that further capital-raising phases are in progress to ensure that First City Monument Bank, the group’s banking subsidiary, retains its international licence under the CBN’s new minimum capital rules.