BY MICHAEL EBOH

FSDH Merchant Bank Limited has announced a profit after tax of N2.62 billion for the 2013 financial year.

Speaking at a pre- annual general meeting (AGM) press conference in Lagos, Managing Director of the bank, Mr. Rilwan Belo-Osagie, disclosed that the after-tax profit was 17.9 per cent decline from N3.19 billion recorded in the 2012 financial year.

The bank recorded profit before tax of N2.066 billion for the year ended December 31, 2013, representing 8.9 per cent decline from N2.27 billion recorded in 2012.

Belo-Osagie blamed the decline in the bank’s profit on start up challenges, increase in operational expenses and the tight monetary policy stance of the Central Bank of Nigeria, CBN.

He explained that for the most part of the first and second quarters of 2013, it operated more as a discount house despite the fact that it officially started operations as a merchant bank on January 15, 2013.

He said, “This was because once we got the merchant banking licence, we had to subsequently apply to the CBN for a foreign exchange dealership licence. Approval for this was received in April and we then started dealing in foreign exchange in May 2013.

“Furthermore, we had to open foreign correspondent banking accounts. This process can be rather lengthy due to the enhanced due diligence that is carried out by foreign banks before commencing business relationships with banks in frontier markets.”

In spite of the decline in profitability, the bank proposed   N978.18 million dividends, representing appreciation of 40 per cent increase, from the N698.7 million dividend declared in 2012. This translates to a dividend of 35 kobo per share, an improvement of 10 kobo per share from the 25 kobo dividend per share declared in 2012.

Belo-Osagie said the company is already beginning to see the benefits of investment made in the previous year namely restructuring, new recruitment, marketing efforts and diversification.

He further stated that, “Our new banking licence opened a wider array of business opportunities for us. We were able to support our customers in the area of import trade finance, enter into new correspondent banking relationships, foreign exchange and through lending activities, supported our growing indigenous upstream oil and gas clientele.

“Our ultimate goal is to create a niche market for ourselves in carefully selected industries where we can add value to our clients’ business venture.

“We will continue to maintain our conservative stance and exercise great caution so as not to rush into creating risk assets that can be detrimental to our growth in the future. Our strategy is to ensure that we build a portfolio of risk assets that would stand the test of time.”