Digital banking, SMEs push Fidelity Bank’s profit by 22%

The management of Fidelity Bank says the 22% profit it recorded in the first half of 2017 can be attributed to deepening market share in the small and medium enterprises (SMEs), retail and digital banking spaces.

According to a statement signed by Ejike Ndiulo, head, corporate communications of the bank, gross earnings rose from N70.3billion in H1 2016 to N85.8 billion for the corresponding period at June 30, 2017.

“The growth in gross earnings was driven primarily by a 27.8% increase in interest income and a 0.7% growth in net fee income to N11.2 billion,” the statement read.

Nnamdi Okonkwo, Fidelity bank’s CEO

“Similarly profits surged by 66.7 percent from N6.1 billion in 2016 to N10.2 billion, just as it recorded growth in operating income, total asset, equity, operational income and other performance indices in the period under review.”

According to Nnamdi Okonkwo, the bank’s CEO, the deepening market share was in line with Fidelity’s medium term strategy.

“Our balance sheet optimisation initiatives continued to deliver improved results as net interest margin (NIM) increased by 7.4% in H1 2017 from 6.4% (2016FY), just as the growth in the yield on our earning assets outpaced the increase in funding costs.

“The process improvement and digital banking initiatives in the period helped to optimize our cost profile as total expenses declined by 1.8% (despite the high inflationary environment) leading to a reduction in our cost to income ratio (CIR) to 67.3%.

“Savings deposits increased by 3.9% to N161.1 billion in June 2017 on the strength of improved cross selling of its digital banking products with over 27% of customers now enrolled on our flagship mobile (*770#) and internet banking products.”