Covid-19 Lockdown, Youthful Population Spurs FCMB to Growth as Digital Revenue Surges

The Covid-19 outbreak that forced consumers to demand more efficient ways to access and complete financial transactions outside the banking hall and youthful population who uses mobile applications to carry out transactions are responsible for a surge in First City Monument Bank (FCMB) Group Bank Plc’s digital revenue.

For instance, for the first six months through June 2022, FCMB’s digital revenue spiked by 51 percent to N17.30 billion, according to data from the lender’s website.

It is not surprising that digital income now accounts for 14 percent of gross earnings, while digital lending now accounts for 61 percent of digital revenues, as increased cross selling of digital products, digital lending products in the retail and Small and Medium Enterprises (SME) Sectors continues to drive increased adoption of digital channels by customers.

It is noteworthy that as a result of consistent uptick in payment and lending, customer acquisition crossed the N10 million mark. Also, 8.3 million digital customers increased 15.3 percent 8.30 million in June 2022 from 7.2 million in June 2021.

FCMB is using its digital platform to accelerate the extension of credit facilities to customers and farmers and traders in the rural areas.

Digital loans surged by 144 percent to N74.0 billion in the period under review from N30.30 billion the previous period. What is more, digital loans account for 6.6% of the Total Loan Portfolio and contributed 21 percent (N43.8 billion) of the total loan growth (N204.3 billion) from 2Q21 – 2Q22.

Digital banking is a game changer and has come to stay even after the Covid-19 that changed the perception of consumers about transactions.

Customers who were not used to utilizing their mobile phones to carry out transactions were forced to do so because of the sit at home orders by the government.

Of course, another factor responsible for the digital adoption is the speed of online payment as payment for utilities are automated and swift.

Nigerian banks are introducing innovative products that ensure that the unbanked are included or captured in the financial ecosystem.

In Nigeria, a high percentage of the population are financially excluded, with data showing that 36 percent of Nigerian adults, or 38 million adults, remained completely financially excluded at the end of 2020.

FCMB is aggressive about lending as its 65.80 percent loans to deposit ratios exceed the minimum requirement of 65 percent.

The loan-to-deposit ratio is used to assess a bank’s liquidity by comparing a bank’s total loans to its total deposits for the same period.

Typically, the ideal loan-to-deposit ratio is 80% to 90%. A loan-to-deposit ratio of 100 percent means a bank loaned one dollar to customers for every dollar received in deposits it received.