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…as digital revenue hits N22.15 bn
First City Monument Bank Group or FCMB Group Plc has more attributes than strong stock performance and low Beta. It pays a juicy 4.12 percent in dividend yields, and has recorded a surge in earnings.
It is interesting to note that the lender has a beta of 0.7316, and its shares have gained 55.06 percent since the start of the year, outperforming the NGXASI index gains of 24 percent.
In the context of the stock market, beta is a gauge of a stock’s movement or volatility compared to the general market – typically the NGX ASI Index.
A beta of 1.0 means that a stock hypothetically has the same magnitude of movement as the overall market. A beta higher than 1.0 means the stock is more volatile than the market.
Generally, low beta stocks can be optimal for investors because they provide less wild swings, and ultimately less risk – all else being equal. On the contrary, some degree of beta is needed within a portfolio to achieve higher returns.
First City Monument Bank Group Plc or FCMB Group’s impressive performance has taken investors’ breath away as the lender continues to make money and earn respect in the digital space.
A 159.22 percent surge in net income resulted in return average equity (ROAE) catapulting to 22.90 percent in June 2023 from 11.10 percent the previous year.
Both Capital Adequacy & Liquidity Ratios remained above regulatory thresholds closing at 16.4 percent and 36.5 percent respectively.
The strong earnings coincided with an attractive valuation as evidenced in a price to earnings ratio of 3.83 times that signals an attractive entry for investors who crave for value stocks which magnifies their wealth.
It is worth noting that the lender’s online and retail banking is contributing to Group revenue as it continues to make banking easier for customers through user friendly applications.
FCMB generated digital revenue of N22.6 billion, which accounts for 9 percent of gross earnings with Lending at N14.6 billion, contributing the largest share of revenues as at June 2023.
Digital loans grew by 18 percent from N74.1 billion in the second quarter of 2022 to N87.2bn in the second quarter of 2023, accounting for 5.7 percent of the Total Loan Portfolio.
Growth in the retail digital lending portfolio was driven by increased adoption of the digital lending platform.