First City Monument Bank (FCMB) Plc Thursday said it had made further provisions and write-offs between the third and fourth quarters of 2011 following observed deteriorations in restructured loans and legacy investments.
In a notification to the Nigerian Stock Exchange (NSE), FCMB said the provisions and write-offs would lead to a loss in the 2011.
The provisions include: N4.9 billion, which relates to impairment in equity underwritings, N11.6 billion relating to losses recorded on the sales of systematically significant and other loans primarily in the oil and trading sector, while N13 billion has to do with other loan losses and write-offs.
According to FCMB, 98 per cent of the assets sold and written off in 2011 were as a result of restructured loans or underwritings initiated prior to 2009.
“The results to be announced next week will show that operating income (prior to these non-recurring charges) grew by 115 per cent. Capital adequacy remains high at 25 per cent after the acquisition of FinBank Plc. The Management of the bank expects that the first two quarters of 2012 will see continued improvements and is likely to exceed its released forecasts for the first half-year,” the bank explained.
Meanwhile, FCMB has announced that the operational and legal integration of FinBank would be concluded by July 1, 2012.
Chief Financial Officer for FinBank and the Integration Director for the FinBank, FCMB Merger, Mr. Patrick Iyamabo, said: “We are on track to meet our integration timeline. A rapid integration process will help contain costs, facilitate accelerated earnings accretion and fast track customer benefits.”
According to him, there are some early benefits for retail customers who now have a combined expanded network of more than 350 FCMB and FinBank ATMs, offering free cash withdrawals. FCMB has set up a hotline, manned by experienced and informed personnel, for customers and other stakeholders who have questions about the merger.”
Although the merger will result in some branch overlaps, which will mean limited branch closures, the bank explained that in those instances, customers will be able to use nearby branches, which will offer best-in-class products, services and technology.
”While the branch closures will result in some redundancies, we believe that the merger will create a platform for the bank to grow rapidly, primarily through increasing its presence in the retail market, and therefore create jobs in the long term,” Iyamabo declared.