For institutional investors, a bank’s ability to keep operating costs under control while growing revenue remains a key indicator of long-term franchise strength. FCMB Group Plc’s latest audited financial statements show notable progress on this front, with its cost-to-income ratio (CIR) improving to 53.75 percent in 2025 from 59.90 percent in 2024. The improvement reflects stronger operating leverage despite persistent inflationary pressures on business costs.
Analysts said the decline in the cost-to-income ratio indicates that the group’s revenue expanded at a much faster pace than its operating expenses, marking an important step toward the widely watched 50 percent CIR benchmark. They noted that institutional investors typically view this level of efficiency as a hallmark of a resilient and sustainably profitable banking franchise.
According to Proshare, the efficiency gain is particularly impressive given the significant increase in operating costs during the year. Total operating expenses rose by 43.41 percent to N328.49 billion, driven largely by a 35.16 percent increase in personnel costs as the bank adjusted employee compensation to reflect inflationary realities.
General and administrative expenses also increased by 54.60 percent to N135.34 billion, reflecting continued investments in technology infrastructure and regulatory compliance.
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However, the report noted that these higher costs were more than offset by strong revenue growth, with total operating income rising by 59.80 percent to N611.11 billion. According to the analysis, the bank’s ability to grow income faster than expenses demonstrates that its digital and retail banking strategies are beginning to deliver meaningful economies of scale.
Proshare said maintaining this operating efficiency will remain a key execution priority for FCMB in 2026. The analysts added that management’s target of reducing the cost-to-income ratio below the 50 percent mark will depend largely on continued digital transformation, which, if successfully executed, should allow stronger revenue growth to translate into higher shareholder returns.