Fidelity Bank’s Profit Before Taxes Increased By 72 Percent To N21 Billion In The First Quarter

Fidelity Bank Plc reported a profit before tax (PBT) of N20.6 billion for the half-year (H1) ended 30 June 2021, up 72 percent from the N12.0 billion it reported in the same period last year. The N20.6 billion PBT was accomplished, according to the tier-2 lending bank, as a result of higher client transactions and enhanced operating efficiency.

The bank had a profit after tax (PAT) of N19.306 billion, up 70% from N11.303 billion in the same quarter of 2020.

Mrs. Nneka Onyeali-Ikpe, the bank’s Managing Director/Chief Executive Officer, said: “We maintained our impressive financial performance with double-digit growth in profit as increased customer transactions drove non-interest revenue while improved operational efficiency continued to moderate cost-to-serve.” As a result, earnings before tax increased by 72.4 percent to N20.6 billion in H1 2020, up from N12.0 billion in H1 2019.”

According to a study of the bank’s financial results for the period, gross earnings climbed by 6.2 percent to N112.3 billion, owing to a 27.8% increase in non-interest revenue (NIR) to N23.8 billion from N18.1 billion in the first half of 2020.

Strong growth in commission on financial services (57.7%), account maintenance charges (50.6%), digital banking income (49.4%), and trade income (49.4%) drove NIR (33.7 per cent).

According to the research, total customer-induced transactions climbed by 58.0 percent year over year and 21.2 percent quarter over quarter across all distribution channels.

“We now have 55.1 percent of our customers enrolled in mobile/internet banking products, and 89.3 percent of customer-induced transactions were done on digital platforms,” Onyeali-Ikpe explained.

The bank exhibited a strong desire to fund the real sector, raising net loans and advances by 15.8% year-to-date to N1,535.4 billion from N1,326.1 billion in the entire year of 2020.

However, actual growth was 14.7%, with the currency adjustment (2020FY: N400.3/$ – H1 2021: N410.6/$) accounting for a 1.1 percent YTD increase in the loan book.

The bank’s performance result also revealed that the cost of risk was 0.3 percent, and the non-performing loans (NPL) ratio (Stage 3 loans) was 2.8 percent, down from 3.8 percent in the previous fiscal year.

Other regulatory ratios are still substantially above the bare minimum: the capital adequacy ratio (CAR) is at 18.8%, up from 18.2% in 2020.

Increased deposit mobilization across all account types drove total deposits up 16.5 percent YTD to N1.980 trillion from N1.699 trillion in 2020FY.

As the bank continues to reap the advantages of its reinvigorated push in the diaspora banking area, foreign currency deposits have climbed by 23.1 percent YTD ($149 million) and now account for 18.5 percent of total deposits, up from 17.5 percent in 2020FY.

“In H2 2021, we look forward to maintaining our current momentum by optimizing our balance sheet and lowering our cost–to–serve, which will translate to improved earnings while remaining committed to our medium to long-term strategic objectives,” the MD stated.

Onyeali-Ikpe outlined a seven-point program focused on innovation, brand refresh, workforce transformation, service excellence, digital transformation, performance discipline, and accelerated development after taking over as the bank’s MD/CEO in January 2021.

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