Nigeria’s FCMB warns of 2011 loss, shares fall
“We will be posting a loss for the full year 2011, arising mainly from some investment and underwriting of several share issues dating back to 2009 and some non-performing loans sold to AMCON (Assets Management Company of Nigeria),” chief executive Ladi Balogun told reporters.
Shares in FCMB were down 5 percent by 1330 GMT at 3.80 naira.
FCMB, which recently completed a buy-out of rescued lender Finbank, said the losses were due to a 29 billion naira write-off for bad loans sold to state-owned “bad bank” AMCON and the underwriting of preference shares issued by Finbank.
AMCON was set up in response to the global banking crisis to absorb non-performing loans from the sector. Rival lender Zenith Bank, the first to announce 2011 results, reported a higher-than-expected risk charge for bad loans for its fourth quarter on Friday, though it posted a pre-tax profit increase of 21 percent.
Zenith’s risk charge raised fears among investors there could be more bank write-downs in the offing.
FCMB is the second lender to issue a warning on its full year results. Write-downs of non-performing loans caused rival bank UBA to issue a profit warning last month.
“We are expecting the balance sheet to pick up by the first half of the year from the synergy with the acquisition of Finbank,” FCMB’s Balogun said.