Fidelity Bank Records An Increase Of 53.9% In Profit In Q1 2020

Fidelity Bank released its unaudited financial report for the first quarter of 2021 at the Nigerian Stock Exchange. In details of the report, the profit before tax of the company went up by an impressive 53.9 percent, to N10.1 billion from the N6.5 billion recorded in the corresponding period of 2020 (Q1 2020). Net revenue also saw an increase of 13.4 percent, from N30.3 billion in 2020 to N34.4 billion in Q1 2021.

Likewise, the bank's gross earnings went up 7.7 percent year-on-year to N55.1 billion on account of 66.7 percent growth in non-interest revenue to N12.1 billion from N7.2 billion in the first quarter of 2020.

Net Interest Margin stayed the same at 6.3 percent compared to the previous year. Average funding cost dropped to 2.5 percent from 3.6 percent in 2020 due to a combination of improved deposit mix and a slight moderation in average borrowing cost.

This led to a 26.2 percent decline in total interest expenses, which translated to a 17.1 percent increase in net interest income to N28.8bn despite a 4.3 percent increase in interest-bearing liabilities. The company refinanced its 7-year N30.0billion Tier II Bonds issued in 2015 at 16.48 percent per annum with cheaper 10-year N41.2billio Tier II Bonds priced at 8.5 percent per annum, which led to a 61bpts drop in average borrowing cost to 4.5 percent.

The bank's operating expenses went up by N1.3 billion (6.2%) to N23 billion, which was majorly due to the N4.3 billion growth in regulatory charges (NDIC & AMCON Charges). Excluding these regulatory charges, the total operating expenses would have been N18.6 billion.

Total Deposits increased by 3.1 percent year-to-date, to N1,751.3 billion, from the N1,699 billion it recorded in the corresponding period of 2020. International currency deposits also went up to N46.9 billion, an increase of 15.7 percent. It now represents 19.7 percent of the total deposits.

The MD and CEO of the Fidelity Bank, Nneka Onyeali-Ikpe, in her comments on the results, stated,

“We commenced the year showing impressive double-digit growth in profitability and improved performance across key efficiency indices whilst ensuring our business model continued to deliver strong positive results in line with our guidance for the 2021 financial year." 

She also gave updates on more indices, "Retail Banking continued to deliver impressive results as savings deposits increased by 4.1% YTD to N441.6bn and we are on course to achieving the 9th consecutive year of double-digit growth in savings deposits. Savings deposits were responsible for 32.9% of the absolute growth in total deposits and now account for 25.2% of total deposits compared to 25.0% in 2020.

We are committed to sustaining our growth trajectory and achieving the long-term strategic aspirations of the Bank as we look forward to delivering another set of good results in the next quarter," She ended by saying.

The bank's net loans and advances went up by 7.6 percent year to date to N1,426 billion from the N1,326 billion recorded in 2020. The actual growth, however, was at 6.8 percent. 

Other Regulatory Ratios which did well by staying above the limit include the Liquidity Ratio which is at 33.9 percent and Capital Adequacy Ratio which is at 18.4 percent from the 18.2 percent recorded in 2020.