In the beginning of the last quarter of 2023, the news made rounds that Fidelity Bank Plc turned in its biggest first-half net profit for the six months to June, riding on the wave of upward interest rate adjustments and a dramatic weakening of the naira by the Nigerian authorities.
A review of the results published on Friday September 1, shows positive performance across all financial indices, reaffirming the bank’s position as one of the fastest growing and well-managed financial institutions in Nigeria.
The half year financial scorecardFidelity Bank recorded remarkable 204.4percent growth in Profit Before Tax (PBT) for the first half of 2023 to N76.3billion, the financial scorecard released to investors at the Nigerian Exchange Limited (NGX) shows.
Fidelity Bank is arguably the Best Bank in West Africa. Fidelity Bank is a full-fledged commercial bank operating in Nigeria, with over 5 million customers who are serviced across its 250 business offices and various other digital banking channels.
The principal activity of the bank continues to be the provision of banking and other financial services to corporate and individual customers from its headquarters in Lagos and 250 business offices. These services include retail banking, granting of loans and advances, equipment leasing, collection of deposits and money market activities.
The bank was recently recognised as the Best SME Bank Nigeria at the 28th annual Euromoney Awards for Excellence 2023; and the Best SME Bank Nigeria 2022 by the Global Banking & Finance Awards. The bank has also won awards for the “Fastest Growing Bank” and “MSME & Entrepreneurship Financing Bank of the Year” at the 2021 BusinessDay Banks and Other Financial Institutions (BAFI) Awards.
Fidelity Bank has a structured corporate governance framework, which supports the Board’s objective of achieving sustainable value. This is reinforced by the right culture, values and actions at the Board and Management level and throughout the entire organisation.
Fidelity Bank’s capital adequacy ratio fell to 16.1 per cent as of 30 June from 18.1 per cent at the end of last year. That was just above the 15 per cent minimum statutory requirement.
Banks in Africa’s largest economy have been posting record profits since about mid-year 2022, helped by the central bank’s dogged resolve to keep increasing the reference interest rate in order to rein in inflation, a push allowing lenders to charge more for loans & advances.
The government’s policy is equally enabling lenders to earn big from loans denominated in foreign currencies, especially the US dollar.
Nigeria’s hawkish monetary policy stance mirrors a global trend noticeable across many central banks as the world confronts an unprecedented cost of living crisis.
However, Fidelity Bank’s gross earnings for the period rose roughly by 60 per cent to N247.1 billion, according to its audited earnings report issued in September 2023.
Focused on select niche corporate banking sectors as well as Micro Small and Medium Enterprises (MSMEs), Fidelity Bank is rapidly implementing a digital based retail banking strategy which has resulted in exponential growth in savings deposits over the last 12 years, with over 57 percent customer enrollment on the Bank’s flagship mobile/internet banking products.
Quoted on the Nigerian Stock Exchange (NSE), Fidelity Bank Plc began operations in 1988 as a Merchant Bank. In 1999, it converted to Commercial Banking and then became a Universal Bank in February 2001. The current enlarged Fidelity Bank is a result of the merger with the former FSB International Bank Plc and Manny Bank Plc in 2005.
Net interest income, which accounts for the difference between what banks charge for loans and how much they pay to savers, grew 42.6 per cent. The lender’s loan book expanded by one-fourth during the period compared to the year ended 31 December, 2022.
Significantly, credit quality deteriorated within the period, causing the bank to set aside roughly N20 billion as credit loss expense, more than ten times the cash it allocated to that purpose a year ago.
“As at 30 June, 2023 gross loans and advances were N2.746 trillion (2022: N2.196 trillion) comprising local and foreign denominated loans against which total loan impairment of N98.919 billion (2022: N80.548 billion) was recorded,” said independent auditors Deloitte & Touche.
Other operating income rose to N33 billion from N2.5 billion, drawing strength from unusual net foreign exchange gains, which contributed 97.3 per cent of that income.
The financial institution also reported a 2,607 per cent increase in Net Gains from Financial Assets at Fair Value through Profit or Loss, which came to N23.4 billion.
Profit for the period stood at N62 billion compared to N23.3 billion.
Fidelity Bank’s shares appreciated by as much as 9.9 per cent in early trading in Lagos after the financial report was released.
In August, the bank announced following an extra-ordinary general meeting it would raise fresh capital by offering 10 billion shares for subscription through a public offer and 3.2 billion through a rights issue on the basis of one new share for every ten held by existing shareholders.
The bank has been thriving so well, under the leadership of Mrs. Nneka Onyeali-Ikpe, who assumed office as Managing Director/CEO, Fidelity Bank on January 1, 2021.
Mrs. Onyeali-Ikpe has been an integral part of the transformation team at Fidelity Bank in the last six years. She was formerly Executive Director, Lagos and South West, overseeing the bank’s business in the six states that make up the South West region of the bank. She led the transformation of the Directorate to profitability and sustained its impressive year-on-year growth, across key performance metrics, including contributing over 28% of the Bank’s PBT, Deposits and Loans.
She is a consummate professional of over 30 years’ experience across various banks including Standard Chartered Bank Plc, Zenith Bank Plc and Citizens International Bank Limited, where she held several management positions in Legal, Treasury, Investment Banking, Retail/Commercial Banking, Corporate Banking. She has been involved in the structuring of transactions in various sectors including oil & gas, manufacturing, aviation, real estate and exports.
As an Executive Director at Enterprise Bank Plc, she received formal commendation from the Asset Management Corporation of Nigeria (AMCON) as a member of the management team that successfully turned around Enterprise Bank Plc.
Mrs. Onyeali-Ikpe holds Bachelor of Laws (LLB) and Master of Laws (LLM) degrees from the University of Nigeria, Nsukka and Kings College, London, respectively. She has attended executive training programs at Harvard Business School, The Wharton School University of Pennsylvania, INSEAD School of Business, Chicago Booth School of Business, London Business School and IMD amongst others. She is also an Honorary Senior Member (HCIB) of The Chartered Institute of Bankers of Nigeria (CIBN).
The Board of Directors commits to ensuring sustainable long-term success for the Fidelity Bank and is mindful that best practice in corporate governance is essential for ensuring accountability, fairness and transparency in a company’s relationship with all its stakeholders.
Fidelity Bank’s shared values of Customer First, Respect, Excellence, Shared Ambition and Tenacity (CREST) continue to be the guiding principles, which it believes are necessary to sustain the growth of the business and the bank’s relationship with stakeholders, while keeping faith with its vision to be number one in every market it serves and for every branded product it offers.
Olamide Adeniji is a member of the editorial team of TheScript Newspapers