Nigeria’s Fidelity Bank Posts ₦11.3Bln Half-Year Net Profits

Nigerian lender, Fidelity Bank, has announced a growth of 33 per cent in its net profits for the half-year ended June 30.

The bank, in a statement on Monday in Abuja, disclosed its net profits rose from ₦8.5bn to ₦11.3bn with the reporting year.

The bank’s gross earnings in its audited results for the half-year ended June 30 was ₦105.8bn.

The positive reports come despite the economic challenges occasioned by the COVID-19 pandemic. And the bank said it had sustained the financial performance trajectory of recent years with another set of impressive financial results.

“Details of the Audited Half Year results ending June 30, 2020 for the top Nigerian lender, released on the Nigerian Stock Exchange (NSE) on September 3, showed strong growth in profits and other indices.

“The bank recorded a surge in profit before tax of ₦12.0 billion from ₦9.8 billion in 2019, which translated to a 22 per cent growth.

“Net profits for Fidelity Bank grew by 33 per cent from ₦8.5 billion to ₦11.3 billion in the reporting period.

In other indices total assets rose by 13.7 per cent from ₦2.1trillion in 2019 to N2.4 trillion this year whilst total deposits rose by 14.8 per cent from ₦1.2 trillion to N1.4 trillion during the same period.

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Chief Executive Officer of Fidelity Bank, Nnamdi Okonkwo, in a statement said the performance for the period reflected the resilience of the bank’s business model.

Due to the global and domestic headwinds witnessed in H1 2020, we proactively increased our cost of risk as the impact of the pandemic slowed down economic activities, whilst adapting our business model to the new risks and opportunities of the new normal,” Okonkwo.

Fidelity Bank re-stated its H1 2019 figures from N15.1bn to N9.8bn to reflect the impact of IFRIC 21- levies, which was adopted for the first time on the H1 2020 financials.

“The key impact of IFRIC 21 was that our 2020FY AMCON cost was recognised 100 per cent in our H1 2020 accounts rather than been amortised over 12 months as was done previously on our financials,” the bank CEO said.

He said that without implementing IFRIC 21, profit for the period would have been ₦17.9bn compared to the ₦15.1bn reported in H1 2019.

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Fidelity Bank has been implementing a digital-led retail strategy and digital banking gained further traction during the period with 87.3 per cent of the bank’s customers now transacting on digital platforms.

The figures are up from 82.0 per cent in 2019FY, while 51.2 per cent of the bank’s customers are now enrolled on the bank’s mobile/internet banking products.

Though digital banking income dropped by 29.1 per cent due to the downward fee revisions for electronic transactions in line with the new bankers’ tariff, Fidelity Bank has continued to receive positive reviews on our digital channels.

Retail banking in Fidelity Bank has continued to deliver impressive results.

Savings Deposits in H1 2020 increased by 32.2 per cent to ₦363.9 billion with the bank on course to achieving the 7th consecutive year of double-digit growth in savings.

Savings Deposits accounted for 49.1 per cent of the total growth in customer deposits and now represents 25.9 per cent of total deposits compared to 22.5 per cent in 2019FY.

In reflection of the bank’s early conservative assessment of the sectors that were affected by the COVID-19 pandemic, the bank’s Non-Performing Loans (NPL) ratio increased to 4.8 per cent from 3.3 per cent in 2019FY.

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“Regulatory Ratios however remained above the required thresholds with Capital Adequacy Ratio increasing to 18.8 per cent from 18.3 per cent due to the capitalisation of H1 2020 Audited Profits while Liquidity Ratio stood at 32.1 per cent.

Buoyed by the H1 performance, the bank is optimistic about the remaining part of the year.

We believe the new phase of normalcy will unveil some growth opportunities. We will continue to monitor and pro-actively manage any evolving risks as the Nigerian economy gradually reopens and economic activities pick-up in key sectors” Okonkwo stated.

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