Fidelity Bank reports 24% increase in PAT, declares N0.20 dividend

Fidelity Bank

Fidelity bank plc has announced 24 per cent increase in Profit After Tax (PAT) for 2019 audited financial year result and accounts submitted to the Nigerian Stock Exchange (NSE) on Monday.

The lender reported N28.4billion PAT in 2019 from N22.93billion reported in 2018 while Profit before Tax grew by 21 per cent to N30.35billion in 2019 from N25.09 billion reported in 2018.

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The Chief Executive Officer, Fidelity Bank,  Nnamdi Okonkwo, commenting on the results stated that “We closed the financial year with strong double-digit growth across key income and balance-sheet lines. This clearly showed that we sustained our performance trajectory and continued to increase our market share driven by significant traction in our chosen business segments.

“Gross Earnings increased by 14 per cent to N215.5billion driven largely by a 15.8 per cent growth in interest and similar income which accounted for 84.6 per cent of total earnings.

“Non-interest income increased by N1.6billion to N33.2billion on account of double-digit growth across key sectors: Credit Related Fees (125.2 per cent), Trade Income (19.7per cent), Account Maintenance Fees (13.6per cent), and Digital Banking Income (13.3 per cent).

“Digital Banking continued to gain traction driven by our new initiatives in the retail lending segment and the enhancement of our existing digital products.

“We now have2 47.4 per cent of our customers enrolled on the mobile/internet banking products, 82 per cent of total transactions now done on digital platforms and 31.1per cent of fee-based income now coming from our digital banking business.

“Net Interest Margin improved further to 6.2 per cent from 5.8 per cent in 2018FY as the growth in our average yield on earning assets outpaced the increase in our average funding cost.

“The improvement in the yield on earning assets to 13.6per cent in 2019FY was driven by a 19.2 per cent growth in our interest income on loans and 6.8 per cent growth in interest income on liquid assets, which led to a 13.2per cent increase in net interest income (N9.7billion).

“Operating Expenses increased by 13.7 per cent to N82.0billion driven by the following cost lines NDIC|AMCON|Technology|Advert which accounted for over 58.4 per cent of the cost growth in 2019FY. Cost-to-income Ratio inched up to 73.4 per cent.

“Total Deposits increased by 25.1 per cent to N1,225.2billion from N979.4bn driven by double-digit growth across all deposit types. Local currency deposits grew by 17.1per cent accounting for 55.7 per cent of the increase in total deposit while foreign currency deposits increased by 60.5 per cent, accounting for 44.3 per cent of the increase in total deposits. Foreign currency deposits at N288.6bn now constitute 23.6per cent of total deposits from 18.4 per cent in 2018FY.

“Retail Banking continued to deliver impressive results as savings deposits increased by 20.7 per cent to N275.2billion making it the 6th consecutive year of double-digit growth.

“Savings deposits now account for about 22.5 per cent of total deposits, an attestation of our increasing market share in the retail segment. Retail loans grew by 42.9 per cent  to N53.8billion driven by our new digital lending products and partnership with Fintechs.

“As at December 2019, we had disbursed over 70,000 micro-loans on our flagship digital lending product (Fidelity FastLoan) in partnership with Migo.

“Net Risk Assets increased by 32.6 per cent to N1,127.0billion from N849.9billion in 2018FY. Foreign currency loans increased by 33.1 per cent and now accounts for 41.2 per cent of the loan book while local currency loans increased by 32.1 per cent and now represents 58.8 per cent of the total loan book. Cost of risk was -0.1% due to the net write-backs (including net losses on derecognition of financial assets measured at amortized cost) we had on our impairment charges.

“Non-performing loans (NPLs) ratio improved to 3.3 per cent from 5.7 per cent in the 2018FY due to the growth in the loan book and a 25.1 per cent decline in absolute NPLs driven by loan write-offs of over N12billion.”

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Ihesiulo Grace

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