Nigeria’s leading Tier 2 lender, Fidelity Bank Plc., began operations in 1988 as a Merchant Bank. The following year, it converted to commercial banking and then became a universal bank in February 2001.
The current enlarged Fidelity Bank is the product of the merger with the former FSB International Bank Plc. and Manny Bank Plc. in 2005. 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 six years, with over 40 per cent customer enrolment on the bank’s flagship mobile/ internet banking products.
At its annual general meeting (AGM) in April 2019, the bank’s Group Managing Director and Chief Executive Officer, Mr. Nnamdi Okonkwo, told shareholders that the lender was on track to breaking into the league of Tier 1 banks by 2022. Indeed, despite regulatory headwinds, a tough business environment and the impact of coronavirus crisis, Fidelity Bank posted one of the most impressive 2020 nine-month results in the industry.
The results confirm that the retail digital banking strategy implemented by the lender, over the years, continues to pay off, as it is now on course to achieving the 7th consecutive year of double digit growth.
According to details of the results, Profit After Tax (PAT) grew by 7.1 per cent, from N19.05 billion as of September 2019 to N20.41 billion in the corresponding period this year, while the bank also recorded a gross revenue of N155.03 billion in nine months.
The results also indicate that Fidelity Bank is the most liquid among its peers as deposits from customers increased from N1.12 trillion as of September 2019 to N1.498 trillion in the corresponding period this year, indicating an increase of 34.21 per cent.
In addition, Fidelity Bank’s cash and balances with the Central Bank of Nigeria (CBN) during the period under review also rose from N4.18 billion to N6.34 billion, an increase of 51.8 per cent.
Similarly, the results show that loans and advances to customers increased by 18.5 per cent from N1.07 trillion to N1.27 trillion within the period under review. In other indices, Fidelity Bank’s total assets grew by 21 per cent from N2.1 trillion as of September 2019 to N2.5 trillion in the corresponding period of this year.
Net interest income appreciated from N58.2 billion to N75 billion within the period, indicating a gain of 28.8 per cent and earnings per share increased from N66 to N70 within the period under review, indicating a gain of about 6.1 per cent. Commenting on the results, Okonkwo said: “Our nine months results reflect our resilient business model, particularly in a very challenging operating
environment We worked closely with our customers to gradually recover from the economic impact of the pandemic and the attendant effect of the lockdown. “Net fee income declined by N1.3 billion largely due to a reduction in FX-related income on account of the revaluation gains recorded in H1’20.
Digital Banking, however, continued to gain traction as we now have 52.3 per cent of our customers enrolled on the mobile/internet banking products from 47.4 per cent in 2019 full year and 88.2 per cent of customer-induced transactions are done on digital platforms. “Similarly, digital banking income increased by 20.0 per cent quarter-onquarter due to improved adoption by customers and new services migrated to our digital channels.
The growth in savings deposits accounted for 40.2 per cent of total growth in customer deposits and savings deposits now represent 25.7 per cent of total deposits, up from 22.3 per cent in 2019.”
He also disclosed that the bank had disbursed over N50 billion in intervention funds to customers in critical sectors, in the last three months, to kickstart the economy after the lockdown and was quite optimistic about finishing the year strong.
“We will continue to monitor and pro-actively manage evolving risks as business activities improve and look forward to delivering another set of resilient results in the remaining quarter of 2020 FY,” he said.
Analysts note that despite the economic headwinds occasioned by the scourge, Fidelity Bank’s 2020 half year results have shown basic improvement in all the major income lines. For instance, the lender’s audited H1’20 results show that gross earnings increased to N106 billion, compared with the N104 billion it recorded in the same period of 2019.
Also, PBT hit N12 billion in H1’20, which translates to a 22 per cent growth when compared with the N9.8 billion recorded in the corresponding period of 2019.
Similarly, net profit grew by 33 per cent to N11.3 billion in H1’20, from N8.5 billion in the comparable period of last year. Total assets rose by 13.7 per cent from N2.1 trillion in H1’19, to N2.4 trillion in H1’20, even as total deposits rose by 14.8 per cent from N1.2 trillion to N1.4 trillion across the 12-month span.
Also, despite the difficult macroeconomic environment, Fidelity Bank had beaten expectations with a quite impressive 2019 full year result, showing strong growth across key income and balance-sheet lines.
“We are delighted at the results, 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,” Okonkwo said at the time.
Therefore, for being able to sustain its impressive performance despite the harsh business environment, Fidelity Bank is New Telegraph’s Bank of the Year.