Fidelity Bank increases profits to N25.1bn, proposes 11k dividend

…’We remain focused on execution of our medium-term strategic objectives, targets for 2019 – Okonkwo

Temitope Adebayo

Fidelity Bank Plc has reported an increase in profits to N25.1 billion for 2018 audited result and accounts for year ended December 31, 2018.

The lender, in its results to The Nigerian Stock Exchange (NSE) on Friday, disclosed that the management proposed N0.11 per share dividend for the second consecutive year, 2018 and 2017 respectively.

The performance which capped a remarkable year showed strong growth in Gross Earnings, Profits and other key financial indicators.

The Tier 2 bank, posted a 4.8 per cent growth in Gross Earnings from N180.2 billion to N188.9 billion whilst Profit Before Tax soared by 30.6 per cent to N25.1 billion when compared with the 19.2 billion it recorded in 2017.

Profit After Tax grew by 29 per cent from N17.7 billion in 2017 to N22.9 billion in 2018, whilst Operating Income rose by 13.9 per cent from N85.9 billion to N97.2 billion.

Customer Deposit, which is a measure of consumer confidence rose by 26. Per cent from N775.2 billion to N979.4bn just as Total Assets grew by 24per cent from N1.4 trillion to N1.7 trillion.

In other indices, Non-Performing Loans (NPLs) Ratio dropped to 5.7 per cent from 6.4 per cent in the 2017FY due to a combination of recoveries, loan write-offs and the absolute growth in the loan book.

Other Regulatory Ratios remained above the required thresholds with Capital Adequacy Ratio (CAR) at 16.7 per cent and Liquidity Ratio at 39.0 per cent.

Commenting on the results, the MD/CEO of Fidelity Bank Plc, Nnamdi Okonkwo said: “We are delighted with our 2018 numbers which clearly showed that we sustained our performance trajectory and continued to increase our market share driven by significant traction in our chosen business segments.

“We restated our 2017 income statement by reclassifying N3.3 billion from interest & similar income to net gains from financial assets at fair value through profit/loss in compliance with IAS 1.82(a).

We also recognized an additional N1.1billion previous year AMCON charges on the Income Statement resulting in a decline in 2017 PBT to N19.2billion from an initial N20.3billion.

“Gross Earnings increased by 4.8per cent to N188.9 billion driven by growth in both fund and fee-based income.

We recorded double-digit growth across key income lines: interest income on liquid assets (16.9per cent), digital banking income (16.4per cent), FX Income (11.6per cent) and account maintenance charge (11.4per cent) among others.

Digital Banking continued to gain traction with over 42per cent of our customers now enrolled on the mobile/internet banking products, over 81per cent of total transactions now done on digital platforms and 25per cent of fee-based income now coming from digital banking.

Net Interest Margin came in at 5.8per cent on account of lower yields on earning assets despite the decline in funding costs. Our average yield on earning assets stood at 12.8per cent compared to an average funding cost of 6.2per cent.

Total Deposits increased by 26.3per cent to N979.4 billion from N775.3 billion as we recorded strong double-digit growth across all low-cost deposit products which reduced funding costs by over 100basis points.

Low cost deposits now account for over 81per cent of total deposits from 77per cent in 2017.

According to him, “We remain focused on the execution of our medium-term strategic objectives and targets for 2019 while we look forward to sustaining the momentum and delivering another strong set of results for the 2019FY.”