First City Monument Bank plc has concluded plans to raise the sum of N100 billion from the capital market. The offer is scheduled to open on Monday October 9, 2007 after a completion board meeting in Lagos. The fundamentals of the bank are highlighted as follows;

Background
First City Monument Bank Plc kicked off as a merchant bank after being incorporated as in 1982. However the advent of the era of universal banking gave owners of the bank a leeway to transform into general banking. The bank which was listed on the floor of the Nigerian Stock Exchange on December 21, 2004 still retains huge competence in investment banking.

Consolidation history
First City Monument Bank Plc is one of the banks that guided jealously its heritage during the phase one of the banking consolidation in Nigeria. Though it teamed up with Co-operative Development Bank Plc, it would not let go its name. Besides, the bank in a bid to cross the hurdle sold 4.0billion ordinary shares at N4.0 per unit to the investing public, an Initial Public Offering through which it amassed over N16billion. It had earlier done a private placement to achieve the same purpose. The underlying factors of the merger between FCMB and Co-operative Bank according to the scheme of merger document was that the enlarged FCMB will have the enhanced financial strength, increased scale and geographical reach to drive both organic growth and compete more effectively in the post-consolidation banking industry. It was also assumed that the bank will benefit from significant cost savings and improved operational efficiencies through a more focused management of resources. Current information made available to the public by the bank suggests that it’s living to its dream at present.

Management
Oladipupo Balogun currently heads a tem of virile managers in the fast growing FCMB Group. The bank in recent times however is experiencing a season of exceptionally high growth under his tutelage. Moreover the bold initiative taken by the bank to widen its management capability by welcoming a team of foreign investors who currently own over 30 per cent of its equity is seen as instrumental to the geometrical growth the bank has recorded in recent times. To be modest, the current management team of the bank could be rated very efficient.

Value for investors
The bank in recent times, has improved on delivering good returns to its shareholders. It emerged the most rewarding stock among the best 10 in the group of 40 carefully selected stocks by Moneywise, a personal finance Newspaper in May, 2007. The Bank, whose shares were traded at N4.15 per unit on the first day of trading on the floor of the Nigerian Stock Exchange this year closed at N14.71 per share in May 30, 2007. It gave its shareholders a return of N254.46 per cent. An investment of N1.0million in the shares of the bank, held tenaciously till this period would have yielded over N2.55million besides the initial capital. The exit value for the N1.0million investor in August rose to N3.82million. For the financial year ended April 30, 2007, Directors of the company have recommended the payment of dividend per share of 35kobo to shareholders. Dividend payout of N3.3billion which represents 57 per cent of the profit of the bank in the financial year is an indication that the bank is committed to wealth creation for shareholders.
It would be recalled that the performance of this stock on the floor of the Exchange has been consistent in recent times. Investors’ besiege on its shares has driven the volume of trading on the stock in the market.
Analysts say recent attraction to the stock was unconnected to its improved financial performance and the interests shown by foreign Institutional Investors in holding equity in the bank.

Performance summary
Revenue grew rapidly for the third year in 2007 at 126 per cent from N11.04bilion in April 30, 2006 to N24.97billion in 2007. The principal revenue lines actually led the growth. Most outstanding of all was interest income (securities & advances) which rose from N0.945billion in 2006 to N7.28billion in 2007, representing increase of 669 per cent. Interest from loan and advances also increased by 64 per cent from N4.41billion in 2006 to N7.22billion in 2007 while interest expenses only went up by 81 per cent from N2.78billion in 2006 to N5.06billion in the review period. Besides interest expenses, the bank also made substantial income from non-interest income which also grew by 74.3 per cent from N5.44billion in 2006 to N9.48billion in 2007.
Pre-tax profit of the bank recorded a triple digit growth of 108 per cent in 2007 at N7.57billion compared to N3.64billion in 2006. Not even the remittance of tax could bring the growth to two as Profit after tax still recorded a 110 per cent growth from N2.83billion in 2006 to N5.95billion in 2007.
It is however expedient for the bank to watch its administrative expenses which grew by 136 per cent from N4.59billion in 2006 to N10.83billion in 2007.
The bank however has continued to grow its asset as cash with other banks increased by 88 per cent in 2007 from N16.62billion in 2006 to N31.21billion in the review period. Besides, deposits with the Central Bank of Nigeria also rose by 141 per cent from N5.85billion in 2006 to N14.1billion in 2007 while long term investment also went up by 409 per cent from N0.42million in 2006 to N2.16billion in 2007.
Meanwhile the bank’s recently published first quarter results for the new financial year ending April 30, 2008 attested to its newly found growth strategy. Earnings grew by 137 per cent from 1.4billion in the first period of 2006 to 3.3billion in the current year.
The first quarter result also shows improved efficiency as the profit margin of the bank which improved from 26per cent in first quarter if 2006 to 30 per cent as at April 2007 further improved to 33 per cent in the first quarter of the new financial year. This is directly linked to improved returns on substantial investments in new business offices/sectors in the last financial year that are now contributing positively to the bottom-line.

Growth Strategy
First City Monument Bank Plc (FCMB), in a bid to enhance growth and deliver good returns to investors, has attracted a total sum of US $300million about N38.4billion credit facility from foreign lending institutions.
This feat, according to the bank was achieved in just six months in 2007.
The latest in the series of three deliveries was the issuance of US$100 million about N12.8billion of Naira Linked Notes by HSBC Bank plc (HSBC), one of the world’s largest financial institutions.
Sources at the bank said it is part of its deliberate strategy to fund its ambitious growth plans through a combination of international debt and equity offerings

The Future
The future no doubt looks very ven recent changes in the ownership structure which to a very large extent has boosted investors’ confidence in it activities. Besides, the new performance formula coupled with sheer determination on the part of management to drive its businesses are expected to deliver good return on investment to shareholders in the short to medium term period.